Chu Sing Wan and Others V.Tai Fat Textile Enterprises Ltd

Case No.HCA 1263/1976

Court

High Court CFI

Date—

Judge—

Case Document

100%Judiciary

HCA001263/1976

IN THE HIGH COURT OF JUSTICE

ORIGINAL JURISDICTION

ACTION NO. 1263 OF 1976

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BETWEEN
	CHU SING WAN, CHU KING LEUNG CHU CHUCK LING and CHU TSE KWAN	Plaintiffs
	and
	TAI FAT TEXTILE ENTERPRISES LIMITED	Defendant

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Coram: Li, J.

Date of Judgment: 28th January, 1977 at 10.20 a.m.

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JUDGMENT

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1. This is an action for damages for breach of covenant. The plaintiffs are the landlords of a property known as 11th floor and roof top of Ching Hing Industrial Building, Kwai Chung, Lot 149 (hereinafter referred to as the suit premises) and the defendant the tenant thereof. By a tenancy agreement dated the 12th of July 1975 the plaintiff let the suit premises to the defendant for three years at the monthly rental of $6,700 exclusive of rates, plus maintenance charges at $800 per month as from the 15th of June 1975. This agreement is exhibited in the agreed bundle, page 1 to 14. By Clause 2(c) of the agreement the tenants agreed as follows:

"To well and sufficiently paint maintain and keep in good repair and condition the interior of the said premises and all the landlords' fixtures and additions thereto. In particular the tenant will replace any broken window pane whether broken by the fault of the tenant or not and will in a like manner replace any part of the toilets, wash basins and cisterns on the said premises if broken or damaged at his own expenses."

Clause 2(d) provides:

	"	That the tenant permits the landlords and all persons authorised by the landlords at all reasonable times to enter into the said premises to view the condition thereof and give or leave notice in writing to the tenant or upon the said premises of all defects and want of repair there found and within one calendar month after every such notice to well and sufficiently repair and make good such defects and want of repair accordingly."
2(e)	"	That the tenant agrees not to paint, affix or exhibit anything upon or outside the entrance doorways, the windows or external walls of the said premises except such as may be approved by the Landlord in writing. Such approval not to be unreasonably withheld."
2(f)	"	Not to do or permit or suffer to be done anything in or upon the said premises which may be or become a nuisance or annoyance or cause damage or inconvenience to the landlord or the tenants and occupiers of the other portions of the said factory or whereby any insurance for the time being effected on the said factory or any portion thereof may be rendered void or voidable or whereby the rate of premium may be increased unless in the event of any increase the tenant first makes to the satisfaction of the landlord's insurance company and all Government departments concerned arrangements beforehand and such action does not prejudice any other tenant of the factory."
2(h)	"	The tenant shall not drill, cut or bore holes or make openings on or in the said premises or any part thereof including walls and floor thereof for any purpose whatsoever without the approval of the landlord."
2(i)	"	The tenant shall mount and equip any machinery liable to produce vibration and every part thereof with antivibration absorbers and anti-dumping absorbers of such types and designs as first approved of in writing by the landlord's architect and shall comply with all directions or orders of the landlord for eliminating and reducing vibrations and dumping produced by the operation and running of any of the machinery installed in the premises."
2(n)	"	At the expiration or sooner determination of the said term of tenancy to deliver up to the landlord the said premises and all fixtures and additions thereto (except the tenant's own trade fixtures) in good repair and condition."
2(q)	"	Not to obstruct or permit any employee or agent to obstruct any passage way, lift, staircase, entrance, exit or other part of the building and it is hereby expressly agreed that if any such obstruction shall happen and the tenant shall fail to remove the same immediately upon request either to the tenant or to the person then in charge of the said premises on the tenant's behalf the landlord his servants or agents may remove the same and the cost of such removal shall be first paid by the tenant before the tenant shall be entitled to the things so removed being returned."

4(a) provides:

"If the rent hereby stipulated or any part thereof shall be unpaid for 15 days after becoming payable (whether legally demanded or not) or if the tenant shall fail or neglect to perform or observe any term or condition herein contained and on the tenant's part to be performed or observed or if the tenant or other the person in whom for the time being the term of tenancy shall be vested shall become bankrupt etc. it shall be lawful for the landlord at any time thereafter to determine this Agreement and to re-enter upon the said premises or any part thereof in the name of the whole but without prejudice to any right of action of the landlord in respect of any breach of the tenant's terms and conditions herein contained."

Clause 6 provides:

"It is hereby expressly agreed and declared and the tenant hereby agrees with the landlord that in the event of any breach of any term or condition on the part of the tenant herein contained, the landlord shall not by acceptance of rent or by any other act whatsoever or by an omission be deemed to have waived any such breach of term or condition notwithstanding any rule of law or equity to the contrary and that no consent to or waiver of any breach shall be binding on the landlord unless the same is in writing of the landlord."

2. It is upon such condition and agreement that the tenant went into possession on the 15th of June. Between June and August 1975 the defendant built a boiler and a shelter to contain it on the rooftop of the suit premises and two dyeing machines on the 11th floor. Then the defendant started operating the factory as a dyeing factory. Some time in January 1976, the landlord sent an architect, one Mr. Lo Wan-kwoot, to inspect the premises and the conditions therein. Mr. Lo subsequently sent a report dated the 7th of January, 1976 to the landlord, the plaintiffs. I shall not read out the report in detail. Sufficient it is to say that it is contained in pages 16 to 18 of the agreed bundle, which indicates that there were extensive damage to the roof of the suit premises as well as the flooring of the 11th floor of the suit premises, penetrating to the ceiling of the floor below, that is the 10th floor of the building where the suit premises situated. On the 6th of April, 1976 solicitors for the plaintiffs wrote to the defendant citing various instances of breach of covenant and gave notice that the lease be terminated. To this letter there was no reply. Again I shall not read the letter itself. It is sufficient to say that it is contained in the agreed bundle as pages 20 and 21. There was no reply to this letter at all. However, there was yet a second inspection by the same architect, Mr. Lo, who gave another report to the plaintiffs dated the 10th of May and contained in the agreed bundle pages 23 to 26. It is not necessary to read out in detail the report. The report repeats the same type of damages that he observed in his visit and inspection in January 1976, except that in certain aspects the damages, or rather the damages to the flooring and beams, were aggravated. To quote one passage of this report it says:

"However the workmen again dropped the cotton yarn beams onto the lobby floor on transporting them to the factory through the cargo lifts. This lift lobby and the exit routes were blocked by piles of fully loaded cotton yarn beams and cans of dyes."

3. Without deciding at this stage as to the accuracy of these two reports it is observed that such reports having been made to the plaintiffs is not disputed. The defendant then moved out of the suit premises soon after the writ was issued by the plaintiffs claiming for possession and damages. That was dated the 24th of June 1976. Some time in July the plaintiffs applied for an interim injunction and the application was not heard. There was a consent order because the defendant undertook to comply with the terms of the injunction subject to the usual undertaking by the plaintiffs as to damages. I shall refer to the terms of this injunction. The injunction was subsequently reduced to the form of a court order and it reads:

"Upon hearing Counsel for the Plaintiffs and for the Defendant and upon reading the affirmations of Chu Chuck Ling and Lo Wan Kwoot filed herein on the 24th day of June 1976, and the Plaintiffs by their said Counsel undertaking to abide by any order the Court may make as to damages in case the Court should hereafter be of opinion that the Defendant shall have sustained any by reason of this order which the Plaintiffs ought to pay and the Defendant by its Counsel undertaking whether by itself its officers directors servants agents or workmen or otherwise howsoever be restrained from doing the following acts or any of them that is to say:-

(a)	Storing beams of cotton yarn or cans of dye at the lift lobby and the passageway of the 11th floor of Ching Hing Industrial Building, Stage I erected on Kwai Chung Town Lot No. 149;
(b)	Dropping or dumping beams of cotton yarn at a height onto the floor of the said 11th floor;
(c)	Allowing waste water or any liquid or water to overflow to the exterior of the said Ching Hing Industrial Building, Stage I; and
(d)	Causing or creating cracks or leakage on the floor of the said 11th floor and the ceiling of the 10th floor of the said building until after the hearing of this action or until further orders."

4. The defendants paid rent up to the 17th of July 1976 and maintenance fees up to the 31st of August 1976. On the 22nd of September 1976 the defendant returned the key to the plaintiffs with a covering letter dated the 22nd of September 1976. It reads:

"With reference to your letter of the 15th instant we are instructed to send you herewith one main entrance key in respect of the above premises for your clients' retention. In view of your repudiation of the tenancy agreement our clients have no alternative but to accept to your wrongful repudiation and without prejudice to our clients' claims against you for the same. Kindly return the rental deposit made by our clients under the said tenancy agreement. Yours faithfully."

5. The aforesaid facts are undisputed subject, of course, to the accurancy of the architect's report.

6. The plaintiffs' case is that the defendant committed a breach of covenant because they built a shelter on the roof, installed a boiler on the roof and the two machines on the 11th floor of the suit premises without written consent of the plaintiffs. Further, they bore holes on the roof as well as holes on the floor of the 11th floor. They demolished two lavatories and removed the fire-resisting doors without written consent. The boring of holes on the roof damaged the water-proofing and caused leakage to the 11th floor and the boring of holes on the 11th floor caused leakage to the ceiling of the 10th floor. Apart from that the defendants piled beams of cotton yarn on the lift lobby and stored cans of dyes and other materials on the passage-way and staircases. There was also the dumping of cotton yarn beams onto the floor resulting in cracks of the floor slabsand the beams of the building on the 11th floor. Finally, the defendants also caused waste water to overflow from the roof of the 11th floor thereby contaminating the external wall of the whole building. There were repeated complaints by the tenants of the 10th floor, the floor below the suit premises. As a result of those inspections such defects were found and such dumping of the cotton yarn beams were found and witnessed by the architect and by one of the plaintiffs himself. On these grounds the plaintiff originally claimed for possession, damages for repairs in the sum of $173,208, rent and rates etc., maintenance charges for the period in which work had to be done for the reinstatement up to $20,000 mesne profit from the 18th of July 1976 to the 22nd of September 1976, the latter date being the date when the key was returned, an injunction to restrain the defendant, and a declaration of indemnity against the defendant in any claim that the tenants of the 10th floor might make against the plaintiffs.

7. The defence case is one of general denial. It is alleged by the defendant that the installation of of the shelter and the boiler on the rooftop were done with the plaintiffs' consent. The installation of the machines was done with the plaintiffs' knowledge but the plaintiffs raised no objection whatsoever. The defendant denied that they ever piled cotton yarn beams anywhere. They contend that their workmen never dumped or dropped any cotton yarn beams on the floors. It is also alleged that the removal of the fire resisting doors and the demolition of the lavatories were done with the plaintiffs' knowledge and consent. It is further pleaded as a matter of law that the plaintiff, having consented to all these acts by the defendant, the plaintiff was estopped from saying that no consent or waiver in writing had been given to the defendant. In addition it is alleged that because of the plaintiffs' unilateral repudiation of the lease, the defendant had no alternative but to accept such repudiation and had to move the factory from the suit premises thereby causing damages in the form of loss of profit, running costs and removal expenses. For the loss of profit and running costs the defendants counterclaim a sum of $100,146.48. For removal expenses the defendants counterclaim a sum of $111,638. In view of the pleadings the general issue to be decided is, first of all, whether the defendant had committed any breach of covenant, and (2), if the defendant had committed any breach of covenant, whether it was done with the plaintiff's knowledge, and if it was with the plaintiff's knowledge whether the defendant was liable to reinstate and restore the condition of the building after they moved out, whether it was justified for the plaintiff to terminate the lease. Finally, if the plaintiff had terminated the lease whether the plaintiff is liable for the counterclaim for damages for loss of profit and removal expenses.

8. There has been no denial that the defendant had built a shelter and a boiler on the roof top without written consent and that two machines were installed on the 11th floor. I find as a fact that the two machines installed on the 11th floor was not a breach of covenant, because the two machines' average weight did not exceed the load of 150 pounds per square foot. It is only when the machines exceed such loading that a written consent is required by virtue of the tenancy agreement of the suit premises. There is also no denial that the defendant demolished at least a better part of the two lavatories on the 11th floor of the suit premises and removed the majority of the fire resisting doors on the same floor. All these were done without consent in writing of the plaintiffs. I accept the evidence of the architect and the plaintiff that there had been dumping of the cotton yarn beams, to a certain extent, onto the floor. There is evidence of constant removal of cotton yarn beams whether full or empty to the suit premises because the defendant operated a dyeing factory. Knowing the propensity of workmen and the weight of such cotton yarn beams whether empty or full, one can understand that they must have dropped it whether at shoulder height or waist height. No one will believe that they place them lightly down on the floor. I accept the evidence that cotton yarn beams, when empty would weigh something exceeding 200 pounds, and when full, would weigh something between 500 and 700 pounds per beam. The dumping of such cotton yarn beams must have caused serious vibration and serious enough to warrant the defendant, on his own evidence, complying with the plaintiff's requests to lay rubber cushions and, later on, steel plates on the lobby of the 11th floor. I also accept the plaintiff's evidence that there must have been constant complaints by the occupier of the 10th floor in particular and probably tenants of the other floors as to the noise and vibration that was unusual even for an industrial building. I also find that such dumpings caused cracks to the floor slabs and the floor beams of the 11th floor.

9. I now come to the report of the architect. Mr. Lo Wan-kwoot. He gave and offered an opinion that these dumpings could, if done repeatedly and for long periods, cause cracks to the floor beams and the floors of the 11th floor. There is evidence of such dumpings on the floor in the suit premises as observed. Even the expert witness called by the defence, Mr. Felix Lo, admitted that frequent throwing down or dropping down the cotton yarn beams on the same spot repeatedly over a period in fair frequency would have the same effect of the floor being hammered by a long handle hammer and could cause cracks. Admittedly Mr. Felix Lo said that, at a quick inspection, he did not see as many cracks as Mr. Lo Wan-kwoot could observe on a careful and detailed examination and inspection. I further find that the waste water which contaminated the external wall came from the roof of the 11th floor. When one looks at the photographs, Exhibits B.1 to B.4, show the various marks. They show the stains emanating from the roof of the 11th floor. On the balance of probability I find the stains come from the defendant's factory which is a dyeing factory. In the course of evidence the defendants admitted that there could have been cracks on the drain pipes without their knowledge. All in all I find that the defendants had been using the suit premises in an untenant-like manner. Exhibits B.13 to B.14 show the piling up of the beams of cotton yarn in the common passageway and they were put in such a way that it is not the type of piling that looked like they were put in transit as alleged by Mr. Li Kin for the defendants. Exhibit B.17 and 18 show the drums and other articles blocking the whole of the staircase. B.11 and B.12 show the waste cotton spread out on the floors. Although these may or may not be storing yet they were put in such a way, that they blocked the stairs and the passage way which, in my opinion constituted unreasonable user of the suit premises in an untenant-like manner. For these reasons, I find as a fact that the defendants were in breach of the various covenants contained in Clause 2 - in the provision of Clause 2 of the tenancy agreement.

10. The next question is to consider whether such breach of covenant were known to the plaintiff. I have already said that the installation of the machines was not a breach of covenant. As to the rest they constituted a breach of covenant though the plaintiff had knowledge of them at all times. One only has to refer to the letter dated the 7th of January, 1976, that is contained in the architect's report to the plaintiffs. This is written to the plaintiffs:-

"Upon your instructions I have conducted a personal survey in the presence of your Mr. Chu Chuck-ling on the 5th January, 1976 for the purposes of ascertaining the conditions of the R.C.C. structure on the 10th floor, 11th floor and the roof. I now report as follows:-

'	Major portion of the roof is occupied by a shelter constructed of corrugated iron supported on posts and beams of steel channels and angles, enclosed by walls of corrugated iron. There is also a boiler room enclosed by 9" brick walls. The posts are not resting directly on the columns beneath. Obviously the roof damproofing has been damaged. Two holes have been made through the roof water proofing and the roof slab. One of them, about 7" in diameter, is used to convey mixed dyes to the machines on 11th floor and the other about 12th" in diameter is used to install a steel funnel. This roof is being used for working space for mixing of dyes, storing and dyeing purposes, for the factory, on the 11th floor.
	The 11th floor is being used for a dyeing factory premises. Two heavy dyeing machines are installed in the middle portion of the premises. The rest of the spaces are used for storage and office accommodation. 15 beams of cotton yarn, each weighing about 700 1bs., were piled up in the lift lobby. Many big cans of dye stuff, each weighing about 200 1bs., were also stored in the lift lobby and along the exit routes and staircases. At the time of our above inspection, some of these beams were being transported to this factory through the cargo lifts. On unloading from the lifts the workmen carelessly dropped the beams at a height, onto the floor causing the floor slab to vibrate. The floor finish has been damaged and hair cracks appeared on some of the floor beams and slabs, as can be seen on the ceiling of the floor below. Many of the lavatories have been omitted. All fire resisting exit doors were removed. Water vapour from the steam used in the dyeing process condensed on the surface of the entire ceiling, dripping even in a day of low humidity. A thick layer of dirt and grease accumulated on the floor.
	On visiting the 10th floor I found some hair cracks on the floor beams and slabs of the 11th floor over, especially on the locations where the said cotton yarn beams are stored, and where the dyeing machines are installed. In several places big holes have been cut right through the ceiling, for the installation of machineries on the 11th floor. These holes were then patched up with cement mortor.

	I confirm that on the day of the above visit, your Mr. CHU Chuck-ling has verbally advised the manager of the said dyeing factory to stop further dropping of the beams of cotton yarn onto the floor.
	I propose to lay a layer of rubber cushion covering the entire lift lobby floor, to absorb the impact caused by the transportation of these beams."

11. Thus, as early as the 7th of January, the plaintiff knew what happened in the suit premises. The waste water discharged although not mentioned in the letter was so visible outside the building that anyone going near the building must have observed it. This is too obvious even from the picture, exhibit B.1 to 4. All the plaintiff requested the defendant to do was to lay some rubber cushions and, later, some steel plates. On the 20th of January Mr. Lo Wan-kwoot wrote to the plaintiff again.

"Upon your further instructions I have conducted a personal site survey of the above premises on 19th January 1976 in the presence of the caretaker of the factory building. I found that the entire lift lobby floor is now covered by a layer of 2 inches thick rubber sheets. However the workmen complained that on dropping the cotton yarn beams onto the floor the rubber cushion causes them to bounce. I have again given verbal instructions, on your behalf to the manager of the dyeing factory to avoid dropping any such beams onto the floor."

12. Incidentally this letter rather reflected the mentality of the workers that even with a rubber cushion on the floor they found it inconvenient and that the cotton yarn beams would bounce if they were dropped. This is yet one more reason why I say, knowing the propensity of workers, they would do things their way and if they wanted to drop them, however heavy, and particularly heavy articles, they would drop them.

13. Coming back to this point I must say that the plaintiffs did rent between the months of January and April before they wrote the letter in April. It is on this basis that it is argued that the termination of the lease or the letter dated 6th April 1976 was not justified. However, waiver has not been pleaded. In this case it is pleaded in paragraph 12 of the amended defence and counterclaim that "the defendant repeats paragraph 6, 7, 10 and 11 above, and says that the plaintiffs are estopped from saying that no consent or waiver in writing has been given to the defendant in respect of the matters pleaded in the aforesaid paragraphs." In his own evidence Li Kin of the defendants conceded that in fact no consent in writing or no waiver in writing had been given. Thus, the evidence rather contradicts the pleadings of paragraph 12 of the amended defence and counterclaim. Had waiver been pleaded the defendant might be able to rely on the principle in the case of the King v. Paulson⁽¹⁾. At page 282, Lord Atkinson said:

The next matters for consideration are, first, what is the true effect, after a breach of covenant or contract involving a liability to forfeiture has occurred, of the payment of rent by the tenant and the receipt of it by the landlord with full knowledge of the breach; and, second, whether the presence in the lease or contract of tenancy of a provision such as that which exists in the lease in the present case, that waiver of a breach shall not be operative unless expressed in writing, destroys or modifies that effect, and if the latter, to what extent. The authorities appear to their Lordships to establish that the landlord, by the receipt of rent under such circumstances, shows a definite intention to treat the lease or contract as subsisting, has made an irrevocable election so to do, and can no longer avoid the lease or contract on account of the breach of which he had knowledge.

They further think the presence in a lease or contract of a provision requiring a waiver to be expressed in writing, such as exists in the present case, does not render inapplicable the principle established, and does not enable the landlord at the same time to blow hot and cold, to approbate and reprobate the same transaction, to say to his tenant, 'You were my tenant under a lease or contract of tenancy all the time during which the rent which you have paid me and which I hold, has been accruing', and at the same time to say to him, 'You were only my tenant for half that time, and were a mere trespasser during the other half, for I evicted you or cancelled your lease in the middle of the time for which you paid me . I had no right to more than half the rent you paid, but I'll keep the whole of it'. It would be wrong and unjust on the part of the landlord so to treat the tenant; to hold in fact the price of what the latter paid for, the enjoyment of his holding for the entire time during which the rent actually paid was accruing, and yet to deprive him of half of that very property."

Had waiver been pleaded in the defence I might have to consider whether indeed the plaintiffs were justified in terminating the tenancy. Even so I find it difficult to apply the principle of the case of Rex v. Paulson in view of the different provisions in Clause 6 of the tenancy agreement. This clause expressly provide that "acceptance or rent would not amount to waiver notwithstanding any rule of law or equity to the contrary". This was agreed to by both parties. In this case if I were to say that the conduct of the landlord had constituted waiver by accepting rent because I could not allow them to approbate and reprobate, then by the same token I would be allowing the defendants to approbate and reprobate by admitting the existence of Clause 6 of the tenancy agreement and say at the same time that the clause had no effect on them.

14. Even if I am wrong and that there has been waiver on the part of the plaintiff, such waiver in my opinion would only bar the plaintiff's claim for possession, or the termination of the lease. It does not bar the plaintiff's right to sue for damages and particularly for a continuing breach of covenant for the damages caused by the breach of covenant. As the case stands it is an established fact that the defendant delivered up possession on the 22nd September, well before this case is heard. It was delivered some three months after the writ was is sued without disputing the plaintiff's claim. Thus the question whether the termination was justified does not arise. Should it arise there is always the provisions in Clause 2(n) of the tenancy agreement which provides that:

"At the expiration or sooner termination of the said term of tenancy to deliver up to the Landlord the said premises and all fixtures and additions thereto (except the Tenant's own trade fixtures) in good repair and condition."

For this reason I am of opinion that the defendant is liable to the plaintiff for damage for breach of covenant.

15. I shall consider the quantum of the damages later on. At this stage it may be convenient to deal with the defendant's counterclaim which is based on wrongful repudiation.

16. Paragraphs 14 and 15 of the amended defence and counterclaim read as follows:

"14.	In reply to paragraph 12 of the said claim, the Defendant says that the Plaintiffs had unilaterally repudiated and terminated the said agreement by is suing the writ.
15.	The Defendant has no alternatives but to accept the Plaintiffs' repudiation of the said agreement and the wrongful termination of the said tenancy."

The relying on paragraphs 14 and 15 the defendants counterclaim the sum I have mentioned before. Reading these two paragraphs together, I cannot help feeling that they are contradictions in terms. Either the repudiation was justified or it was wrongful. If it is justified the defendant should have no cause for complaint. If it is wrongful then the defendant would not be in a position to have no alternative but to accept. The proper alternative for the defendant was to retain the legal estate and to retain possession and to fight the issue. In any event the defendant retained possession up to September 1976. The defendant need not vacate in September 1976 if the repudiation was wrong. In any event, the defendant as a tenant had a legal estate and the plaintiff's repudiation did not put an end to the legal estate that was created by the lease. In Megarry's "The Law of Real Property", Fourth Edition, at page 655, the learned author, as he then was, says:

"2. Covenants. In other cases the lease is subject to forfeiture only if there is some provision to that effect in the lease. Nearly every lease contains a list of things which the tenant shall and shall not do, and these may be framed as conditions or as covenants. If, as is normally the case, they are framed as covenants (e.g., 'The tenant hereby covenants with the landlord as follows .....'), the landlord has no right to determine the lease if they are broken unless the lease contains an provision for forfeiture on breach of a covenant. There is no necessary connection between the tenant failing to perform a covenant made by him and the determination of the lease; even a breach of covenant which the other party accepts as a repudiation will not put an end to the estate in the land created by the lease. Every well-drawn lease consequently contains a forfeiture clause."

In the case of Total Oil Great Britain Ltd. v. Thompson Garages (Biggin Hill) Ltd., 1972 1 Q.B. 318, Lord Denning at page 324 said:

"The second point is: what is the effect of the repudiation by the oil company which was accepted by the dealer? Dcesit put an end to the lease? I think not. A lease is a demise. It conveys an interest in land. It does not come to an end like an ordinary contract on repudiation and acceptance. There is no authority on the point, but there is one case which points that way. It is Leighton's Investment Trust Ltd. v. Cricklewood Property and Investment Trust Ltd. (1943) K.B. 493 sub nom. Cricklewood Property and Investment Trust Ltd. v. Leighton's Investment Trust Ltd. (1945) A.C. 221. Lord Russell of Killowen and Lord Goddard, at pp.234 and 244, were both of opinion that frustration does not bring a lease to an end. Nor, I think, does repudiation and acceptance."

By issung a writ the plaintiff merely claimed to put an end to the legal estate which remains valid until an Order for possession is given by the courts. By giving up possession without a court order, the defendant voluntarily surrendered the legal estate and surrendered his term of the tenancy to the plaintiff. For example, if there had been no breach of covenant at all and the plaintiff issued a writ, the defendant would not be obliged to move out of the possession, would not be obliged to give up the legal estate. Thus in my opinion the termination was due to the defendant's own volition, not to repudiation. This is supported by the evidence that even before the issue of the writ which was on the 24th June, 1976, the defendant had already obtained quotations for the removal of his machinery out of the premises. This is evidenced in Exhibit Q, the quotation that was produced by the defence which is dated the 23rd June, 1976, a quotation for the removal of certain of the defendant's machinery from the said premises to another place. I further find as a fact that the defendant surrendered the premises voluntarily, not because of the letter dated the 6th April, 1976 (of course there is no pleading to that effect), not because of the injunction of the 17th July, 1976, The defendant need not give any undertaking when they denied that they had done any such acts constituting a breach of covenants, and certainly not because of the issue of the writ. The defendant had already anticipated the writ by preparing for the removal well before the writ was issued. The defendants moved because they found that, after the receipt of the letter dated the 6th April, they were in fact in breach of the various covenants and that they would not be able to carry on their business in the said premises without further or continuing to infringe such covenants. The giving of the undertakings to abide by the terms of the interim injunction was too easy because ever since the defendant found that they were in such a position, they were prepared to move out anyway. The counterclaim is just a red herring. For these reasons I do not feel that I need deal with the details of the counterclaim by the defendant. Suffice it to say that for these reasons the counterclaim must be dismissed with costs.

17. Now I come to the question as to quantum of damages for the plaintiffs. In the evidence, the plaintiff has submitted a quotation given by Simon Construction & Engineering Co. for restoring the suit premises to their original state. Under Clause 2(n) of the tenancy agreement which I shall not repeat, the defendants are obliged to reinstate and restore the premises. Clause 2(c) of the tenancy agreement obliges the defendant to paint the walls. There had been serious damage due to the steam from the boiler and machines. There was dirt on the floor because of the operation of machinery. This, apart from the breach of covenant, is just an ordinary duty under the tenancy agreement. Having found that the defendant was in fact in breach of covenant and caused the damage, as I accept the plaintiff's evidence, I am of the opinion that the defendant is liable to restore them to their original condition. The expert who has been called by the defendant, Mr. Felix Lo, agreed that this was of a type of work regarded by some contractors as a small job and that it would be difficult to find people willing to do it. He said that $173,288 was much higher than he himself felt. But he could not say that it was unreasonable. He said the price varied from contractor to contractor. One might be considerably cheaper but sometimes another might quote an even higher figure than the one in evidence. For this reason I find that $173,288 is not excessive. The plaintiff has agreed to allow $2,000 as fair wear and tear. The plaintiff asks for mean profit between July until the date of possession. That is the entitlement of the plaintiffs' as of right. Maintenance charges and mean profit are what the plaintiffs are entitled to as of right. There is some dispute as to the time required for reinstating and restoring the condition of the suit premises to their original state. On this point the export said that 30 days should be quite sufficient. That is the only evidence I have, except the contractor's own opinion, saying that he would require 70 days. Taking that into consideration I am inclined to cut the time for repair by half, in other words to 35 days. Thus the loss of profit that may be recovered is to the sum of $4,995. As to the declaration of indemnity, I do not find that I am justified in making such declaration because there is no evidence that the tenant of the 10th floor has put in any claim as yet. In any event the repair of the suit premises including the repair to the floor and ceiling of the 10th floor could have put the position of the tenant on the 10th floor right. In view of the foregoing I shall now give the plaintiff an all-in-all figure for the damages for reinstating the suit premises, for the mesne profit and maintenance charges and for the loss of profits. Calculated on the following basis viz: $171,288 for breach of covenant; $4,995 for the time and loss of profit and repair; $586 for the maintenance charges and $14,963 for mesne profit between the last payment of rent until the date of possession. This makes out to be $191,832. The plaintiff should also have the costs of this action.

Representation:

(1) (1921) Law Reports, Appeal Cases 1921/1.