Chan King Choi v. Lau Wing Keung
Read the full judgment text of HCA 12151/1982 on BabelCite. This High Court CFI judgment.
1. The plaintiff in A 12151/82 was Chan King Choi and his wife Ng Ah Kiu was the plaintiff in A 12150/82. Mr Chan was the owner of shop A5 on the ground floor of King Po Mansion, Hing Fong Road, Kwai Chung. The adjoining shop, A4, was owned by Madam Ng.
|
HCA012151/1982
IN THE SUPREME COURT OF HONG KONG HIGH COURT ____________ BETWEEN
Coram: Master Hansen in Chambers Date of Hearing: 4th October 1983 Appearances: Mr Sujanani instructed by Messrs Ip, Ku & Stoppa for Plaintiff Mr H.Y. Wong instructed by Lo, Wong & Tsui for Defendant _________________________ ASSESSMENT OF DAMAGES _________________________ 1. The plaintiff in A 12151/82 was Chan King Choi and his wife Ng Ah Kiu was the plaintiff in A 12150/82. Mr Chan was the owner of shop A5 on the ground floor of King Po Mansion, Hing Fong Road, Kwai Chung. The adjoining shop, A4, was owned by Madam Ng. 2. On the 27th of January 1979 the plaintiff's entered into separate agreements with the defendant for their respective shops (which in reality formed one unit as a dividing wall had been removed). These tenacy agreements were for years from the 5th day of December 1977. The rental for A5 was $2,500 p.m. and for A4 $3,500 per month. It was common ground that a notices to quit in respect of both tenancy agreements were sent to the defendant by the plaintiff's solicitors on the 3rd of March 1982. In December 1982 both plaintiffs issued the writs in these two actions claiming (in the amended statement of claim) possession, special damages or alternatively mesne profits to be assessed and costs. It was agreed that the defendant finally vacated both shops on the 10th of June 1983. The parties could not agree on mesne profits from the 5th of December 1982 until the 10th June 1983 hence this hearing. 3. For the two plaintiffs' evidence was given by Mr Chan who conducted all negotiations in relation to the letting of the shops and by his wife Madam Ng. Mr Simon Lai of the firm of Knight, Frank, Kan and Baillieu valuers and surveyors. For the defence, the defendant (in both actions) Lau Wing Keung gave evidence. Mr Wong also attempted to adduce evidence on behalf of the defendant from a valuer Mr Maguire. However, it transpired that Mr Maguire had not been to the premises and had no personal knowledge of this matter. Apparently, his evidence was to be based on some rough notes made by some former member of the staff of A. G. Wilkinson & Ass. On Mr Sujanani's submission, I ruled this evidence to be inadmissible. The Evidence 4. Mr Chan gave evidence of the tenancy agreements relating shops A4 and A5 that expired on the 5th December 1982. He gave evidence of instructing his solicitors to send the Notice to Quit in March of 1982. He said that after that he spoke to the defendant (on behalf of his wife as well) about the two shops. He said in November 1982 he spoke to the defendant and said to him that the tenancy expired soon and was he interested in staying and that the defendant asked the rent and was told $25,000 per month consisting of $15,000 p.m. for one unit and $10,000 p.m. for the other. During cross-examination, without prompting, when he was dealing with another matter entirely, Mr Chan corrected his earlier evidence and said the date was in fact November 1981. This was not challenged. He said he had a further discussion with the defendant about the 2nd or 3rd of June 1982. He told the defendant that someone else was interested in renting the two shop units but that he was prepared to give the defendant priority. He stated that the defendant told him the new rent was too high. Mr Chan then gave evidence of negotiating with another shop keeper in the area, a Mr Tai, regarding the lease of the shop. Eventually, the two plaintiffs entered into tenancy agreement with this Mr Tai. Mr Chan produced these and it revealed that both shops were let for a period of 3 years from the 5th December 1982. Shop A5 was let for $10,000 p.m. and A4 for $15,000 p.m. There was a common clause in both agreements. This was clause 8 which recited the facts of the agreements between the plaintiffs and the defendant; that these agreement expired on the 4th December; that notice to quit had been issued; and that if the defendant failed to deliver up possession on the 4th of December the new tenancy would not commence until vacant possession had been delivered up. Mr Chan finally stated that the defendant eventually vacated the premises on the 10th of June 1983. His wife, Madam Ng, gave evidence that corroborated that of her husband. 5. The plaintiffs also called Mr Simon Tai, a qualified valuer employed by Knight, Frank, Kan & Baillieu, to give evidence. His evidence was that the rental value of the two shop, in an open market situation would have been $25,000 p.m. in June 1982 and $22,500 p.m. in December 1982. He also gave evidence as to the method he used to calculate these figures. Despite extensive cross-examination by Mr Wong the witness was not shaken in his opinion. 6. As I had ruled the evidence of Mr Maguire inadmissible the only evidence for the defence was that of the defendant himself. That evidence was quite brief although Mr Sujanani's cross-examination was somewhat longer. The defendant acknowledged that he received a notice to quit in March 1982. He said that he did not approach the plaintiffs after receiving the notice to quit. He said his only conversation with the plaintiffs was after December 1982. This was when Mr Chan approached the defendant who claims he told Mr Chan he wanted several months to move out. He claimed Mr Chan's reply was that he hoped the defendant could move out as soon as possible. He denied that that he had ever been told by the plaintiffs about, the tenancy agreements with Mr Tai. He maintained the first we had ever heard of these agreement was in April 1983 when his solicitor told him about them. Under cross-examination the defendant agreed his business was the sale of Chinese herbs and medicines and that he had about 14 other premises in Kowloon and the New Territories. 7. In considering the evidence of both sides I have no hesitation in accepting the plaintiffs evidence. Mr Chan was straightforward in his evidence and I accept all his evidence. On the other hand I found the defendant to be an evasive witness. Where there is a conflict in the evidence I accept the evidence given by the plaintiffs and reject that giving by the defendant. It follows, therefore, that I accept there was a discussion between Mr Chan and the defendant at which the defendant was offered priority for a new tenancy. I also accept that the defendant rejected this because he felt the rent was too high and I also accept that he was aware of Mr Tai and the new tenancy agreements with him. I find as a fact that two agreements entered into by the plaintiffs and Mr Tai were "arms length" transactions. I also accept the evidence of valuations given by Mr Simon Tai the other witness for the plaintiffs. 8. The general principles of law applicable to an award of mesne profits were set out by Megaw L. J. in Swordheath Properties v Tabet [19797] 1 ALL ER 240 .
9. In this particular case it is not necessary to attempt to calculate the "ordinary letting value of the property". There are the two "arms length" tenancy agreements which clearly establish the letting value of the property i.e. $15,000 per month for shop A4 (HCA 12150/82) and $10,000 per month for shop A5 (H G A 12151/82). Unless there was evidence to show these two tenancy agreement were something other than "arms lengths" transactions it would be quite wrong to go behind these figures. As I found earlier, both the agreement were "arms length" transactions. The plaintiffs are entitled to mesne profits from the 5th December 1982 until vacant possession (i. e. 10th June 1983 as pleaded). 10. Mr Wong suggested that despite the refusal of the defendant to move out the terms of the two tenancy agreements meant that the plaintiffs still enjoy the new rates of rent for 3 years. This is so but to take such a submission one step further would involve speculation on my part as to rental levels in 3 years time. This is clearly too remote for me to undertake.
11. In relation to both actions there will be the following order as to costs:- 12. Costs to the plaintiff excepting the costs of the adjournment on the 20th June 1983 which shall be to the defendant. Late on the afternoon of the 3rd of October I was told the, valuation witness the defendant proposed to call was not available and I was asked to adjourn the hearing till the next day. On the 4th of October it transpired
13. There will be an order returning the original tenancy agreements to the plaintiffs solicitor. Photocopies to be kept on the Court file.
Representation: Mr Sujanani instructed by Messrs Ip, Ku & Stoppa for Plaintiff Mr H.Y. Wong instructed by Lo, Wong & Tsui for Defendant |