Cheung So Yin Kay v. Cheung Biu
Read the full judgment text of HCA 1334/1969 on BabelCite. This High Court CFI judgment.
1. The plaintiff is the owner of a building known as the Hung Yan Building which is situated in Shaukiwan Main Street, East. The building consists of six stories and each story is let as a factory for light industry.
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HCA001334/1969 IN THE SUPREME COURT OF HONG KONG ORIGINAL JURISDICTION ACTION NO. 1334 OF 1969 -----------------
----------------- Coram: Briggs J. in Court. Date of Judgment: 2nd July, 1970. ----------------- JUDGMENT ----------------- 1. The plaintiff is the owner of a building known as the Hung Yan Building which is situated in Shaukiwan Main Street, East. The building consists of six stories and each story is let as a factory for light industry. 2. The defendant is engaged in the printing trade under the name of Sun Yu Printing Company. 3. On 24th January, 1969 the defendant leased the first story of the building from the plaintiff for a period of four years at a rent of $2,100 per month. It was stipulated that the defendant should pay the rates which amount to $918 per quarter. 4. The defendant entered into possession shortly before the lease was signed. In the course of carrying on his business he installed various printing machines and from time to time there were considerable stacks of paper used in his business on the premises. 5. The lease contains various covenants, with two of which we are here concerned. One. The tenant covenanted:-
And, two, there was a covenant against overloading the floor of the factory. This reads as follows:-
The lease contains the usual proviso for re-entry by the landlord in case of any breach of any of the covenants in the lease including the two referred to above. 6. The plaintiff asks for possession of the premises alleging that the defendant is in breach of the two covenants set out above. 7. Mr. Alex Koo the architect of the plaintiff, who is also a civil engineer, paid a visit to the premises on 10th March, 1969. It was what he called 'a routine check up'. He said that it appeared to him that the factory was overloaded both as regards the machinery but particularly as regards the paper. He saw paper stacked on the floor of the factory as high as 4' 6". The factory was built (by Mr. Koo's firm) to sustain a load of 150 lbs per square foot - the figure allowed in the lease. Mr. Koo said it is well known that paper should not be stacked higher than 2' 6" if the rate of 150 lbs per square foot is not to be exceeded. 8. Mr. Koo informed the plaintiff of his impression and she complained to the defendant two days later. [Her complaint is at page 16 of the agreed bundle of documents.] This was followed up by a solicitor's letter on 19th March 1969. There were further complaints made by the plaintiff on 30th April, 8th May and 2nd September. There appears to have been no reply in writing to these complaints but it would seem from page 26 of the agreed bundle that the parties were in communication. However, the defendant did not satisfy the complaint of the plaintiff and a writ was issued on 30th October, 1969. 9. Before this, during the months of June, July and August 1969, the Police had sent the defendant written complaints threatening him with the non-renewal of his licence as a printing press unless he stacked his paper stocks in such a way as to avoid what is described as "dangerous overloading". The Police informed the defendant that the complaints had originated from the Building Authority and that the correct height to stack paper was 2' 6". The only effect of this appears to be a request by the defendant for an extension of 15 days' time as from 26th August, 1969 to enable them to comply with the Police instructions. 10. On 1st December, 1969 the plaintiff's architect again visited the premises. He was accompanied by a photographer. There was a certain amount of unpleasantness and I was told that the camera of the photographer was damaged. 11. Be that as it may, on this occasion Mr. Koo saw paper stacked to the height of some four and a half feet. This was photographed and a print put in evidence. In addition, Mr. Koo saw three holes cut in the north wall of the factory: one of these was cut through one of the main reinforced concrete floor beams holding up the second floor and the ceiling of the first floor. No detailed examination was possible on this occasion. 12. But it was arranged between the parties that there should be a proper inspection of the premises in the presence of the solicitors representing each side, and a photographer. This was done on 17th December, 1969. A thorough inspection was effected and detailed plans were made, which have been of great assistance to the court. In addition some 21 photographs were taken and put in evidence. Mr. Koo examined the hole he had seen before in the main beam. He said it was 24" in diameter. From the plan it appears that the beam is 9" thick and 36" wide and is made of reinforced concrete. It forms part of the frame work of the building. Mr. Koo described it as a wing beam. He said that some of the steel reinforcing rods had been cut through. 13. Mr. Koo said that the cutting of the hole affected the structural safety of the building and was a serious matter. How serious he could not specify without a further examination. But to repair the beam would be an expensive operation and would cost between $5,000 and $20,000. An exhaust fan has been fixed in the hole and was in use on the occasion on which the court visited the premises. 14. There were two other holes on the same wall but they are of minor importance as they are merely holes in the brick walling and do not touch any beam or affect the structure of the building. 15. On this occasion the 17th December as on the date of the visit by the court, there were nine machines in the factory. 3 of these were folding and cutting machines which are light and need not concern us here. However, there were six printing presses. This is one more than Mr. Koo had seen on his visit on 1st December, 1969. 16. Mr. Koo caused the overall size of each printing press to be measured together with the area of its base, namely that part of the press which was in contact with the floor of the factory. 17. Mr. Koo was supplied with a figure representing the weight of each press which had been given by the defendant. Using this figure he worked out the pressure under the base of each machine per square foot. In each case this showed a load of more than 150 lbs per square foot. The figures range from 165 lbs per square foot to 308 lbs per square foot. He said that to arrive at the correct figure of load when a machine was working 25% of the load under the base of the machine when stationary should be added. This means that the figures were between 206 lbs per square foot to 385 lbs per square foot. 18. Mr. Koo also said that the stacks of paper which he saw on the premises on the 17th of December was stacked higher than 2' 6". 19. In his view the machines and the paper were clearly overloading the floor of the factory. If I understand the evidence of Mr. Koo rightly the way the factory is constructed allows for some distribution of weight of any object placed or standing on the floor. And when that object is of a substantial weight it must be mounted on the floor in such a way as to distribute the weight so that the result is a load of not more than 150 lbs per square foot. He said that the presses were poorly installed. It would be possible for them to be remounted on the floor in such a way that their weight would be distributed so that it would not exceed the permitted 150 lbs per square foot. One way to overcome the present overloading problem would be to remount the presses on a system of sleeper beams and to furnish them with anti-vibration pads. This would go far to absorb the vibration and shock of the presses when working and would distribute the load effectively. 20. Mr. Koo obviously paid more attention to the question of the paper than to the machinery. It is necessary to have large quantities of paper available in a printing press. And when the court visited the premises it was clear that a substantial part of the floor of the factory was devoted to stacking paper. There is no method of distributing the weight of the paper if it is stacked higher than the usual figure of 2' 6", for there is no room enough for a platform to be constructed to distribute its weight. It is obvious, I think, that the defendant's printing works is too large for its present accommodation. 21. When the case came on for trial the plaintiff asked for leave to amend his statement of claim. This was granted the defence, rightly, making no objection. The amended statement of claim mentions the hole in the beam for the first time: this complaint had formed no part of the original claim. It was only discovered on 1st December after the issue of the writ. The defendant did not therefore deal with this matter in his defence. However, in the witness box he stated that he was not responsible for making it. He said that it was there when he first went into possession. He also said that there were two holes only in that wall at that time and added that only two holes were there now. This is not so, when the court visited the premises three holes in the side wall of the factory were clearly visible. 22. However, in cross-examination the defendant said that when he entered into possession there was a small hole in the beam which he caused to be enlarged so that he could install the exhaust fan, which it now contains. In a letter of 12th December 1969 the solicitor for the defendant makes it abundantly clear that the defendant was responsible for the construction of this hole. He offered to restore the beam to its original form but added that he had only made the hole after an employee of the plaintiff had given his consent. This man, Fung Kowk Shing, was called as a witness by the plaintiff and he denied this. He said that he was a rent collector in the service of the plaintiff and collected the defendant's rent from him. He remembers no hole being in the wall of the factory at the commencement of the lease of the defendant. He said on 17th December when he went to the factory with Mr. Koo, he saw the hole. He had never consented to the making of the hole and indeed he had no authority to do so. 23. Where the evidence of the defendant and that of Mr. Fung conflict on this point, I much prefer the evidence of the latter. I find him to be an honest witness and of course the evidence of the solicitor's letter and the statement of the defendant in the box on cross-examination are at variance with his original denial that he had made the hole. I find as a fact that he cut or caused to be cut the hole in the beam. 24. It is obvious that to drill a hole of these dimensions in a beam which is part of the frame work of a building of this nature is a breach of the covenant first quoted above. I find that the defendant is in breach of that covenant which is contained in paragraph 2(o) of the lease. 25. I will now turn to the second covenant set out above, which is concerned with overloading. 26. It is obvious from the evidence and indeed, from the statement of defence, that the defendant was of the opinion that what the covenant guarded against was too great an overall weight in the factory. Paragraph 5 of the defence states that the defendant had never overloaded the floor of the factory. "In fact", it states, "the floor area of the ...... premises ...... is approximately 2,900 square feet, and therefore the total permissible load thereof at 150 lbs per square foot would be about 430,000 lbs." Elsewhere in the defence the total weight of five of the presses is given at 38,660 lbs. 27. The question of the weight of paper stacked on the floor, a sixth printing press, a large modern machine for colour printing, and the 3 folding or cutting machines are ignored in these figures. It will be noted that this printing press was installed after the repeated warnings of overloading given by the plaintiff and the police to the defendant. And after the issue of the writ in this case. 28. The covenant cannot be read in the way that the statement of defence suggests. From its wording it is clearly designed to prevent the overloading of any part of the floor to an extent greater than 150 lbs per square foot. 29. There was abundant evidence before me to show that the presses as at present mounted violate the covenant. All six of them are bearing on the floor a load in excess, far in excess, of 150 lbs per square foot. 30. As to the stacking of the paper the defendant in his evidence admitted that before the warnings sent by the police he used to allow the stacking of finished articles, i.e. school books etc. higher than the 2' 6" permitted. When shown photographs of stacks of paper higher than the permitted height taken on 1st and 17th December of last year he merely said they were finished articles. This does not matter. The finished articles were books and would have been as heavy as the paper out of which they were made. 31. There is abundant evidence of the over stacking of paper in the factory and despite warnings both from the police and from the plaintiff it continued. The fluorescent lighting installation over that part of the factory which is used for stacking paper has been removed. It was suggested that this was done to enable the defendant to stack paper even higher than 4' 6" the greatest height of which there was evidence before me. Ignoring that, there is no doubt that there was over-stacking of paper in the factory and that the defendant was in breach of the covenant. I find as fact therefore that the two covenants were broken by the defendant. 32. The plaintiff claims forfeiture of the lease. However, the defendant asks for relief against forfeiture invoking the equitable jurisdiction of the court. This was sought in a counterclaim, a procedure favoured by the Full Court in Ta Sheng Plastic Goods Co. Ltd. v. Green Island Cement Co. [H.K.L.R. 1966 24]. 33. The question is whether the court here in Hong Kong has jurisdiction to grant relief from forfeiture for the breach of a covenant in a lease other than a covenant to pay rent or a covenant to insure. The latter is conferred specifically by section 5 of the Law of Property Amendment Ordinance (Cap.24). 34. This branch of the law has been extensively developed in England by various statutes which do not apply in Hong Kong. Apart from statute law the authorities clearly show that the only instances where relief would be given in cases where there is a breach of a covenant other than a covenant to pay rent, are cases where the breach was due to some accident, surprise or mistake. At first it was thought that relief would be given in any case where full compensation could be given to the landlord. This view did not prevail. Barrow v. Isaac & Son [1891 1 Q.B. 417]. In the present case the breaches of covenant could possibly have been compensated for by certain remedial work and a sum by way of compensation to the plaintiff. This is in view of the state of the law immaterial. It is notorious that rents in Hong Kong particularly for industrial property have increased during the last year. So it is probable that the plaintiff will receive back a more valuable property than was leased. But that also is immaterial. Job v. Banister 1856 2 K & J. 374. 35. There being no jurisdiction to grant the relief sought the claim for relief from forfeiture must fail. 36. The plaintiff is entitled to an order for possession. This will be a serious matter for the defendant and I think he is entitled to a reasonable period of time to make arrangements for the dismantling and removal of his presses. I will therefore grant a stay of execution up to 1st October 1970. 37. Very little evidence was given about damages. Mr. Koo said that the repairs to the hole in the beam would be between $5,000 - $20,000. I will award the lowest figure i.e. $5,000. 38. The plaintiff is entitled to $2,100 as rent owing for the month of September 1969 and in addition to a like sum per month as mesne profits from 1st October until the premises are vacated. The defendant must also pay the amount of rates outstanding at $918 per quarter commencing with the last quarter of 1969 and thereafter until vacant possession. 39. The plaintiff is to have the costs of the claim and the counterclaim is dismissed with costs. 40. There will be liberty to apply for a further stay.
Representation: Gittins Q.C. & Zimmern (Lo & Lo) for Plaintiff. B. Liu (M.K. Lam & Co.) for Defendant. Judgment read in Court. |