Fu Lam Investment Co Ltd v. Mok Cheong Che

HCA001978/1983

BETWEEN

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Coram: Deputy Judge Hopkinson

Date:

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JUDGMENT

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1. In this case the plaintiff company sues the defendant for vacant possession of business premises, let to the defendant under a tenancy agreement for 2 years dated 10th November, 1980.

2. The tenancy was due to expire at the end of October 1982. Accordingly on 29th March 1982 the plaintiff company gave the defendant notice to quit the premises on 31st October 1982.

3. During the first part of October, P.W.1 (who is a joint Managing Director of the plaintiff company) went to see the defendant more than once to discuss what was to happen after the expiry of the lease. What was said is at issue, and nothing was agreed.

4. Thereafter, during the second half of October and the final days of the lease, the defendant proceeded to wall-in the suit premises. He then purported to deliver possession of the premises to P.W.1.  But by that time the premises were sealed-in by the wall and P.W.1 protested that he could not get into them !

5. The position has remained like this ever since. So the plaintiff company says the defendant has failed to deliver possession of the premises and they ask for vacant possession, mesne profits, damages and an order that the defendant pull down the wall.

6. The suit premises consist of a long, shallow space in the exterior wall of a shop, 20 feet wide and 3 feet deep. 'The shop is owned by the plaintiff company and let to a third party, who is not concerned in this case.

7. The space was originally let to the defendant in 1972 by a Mr. Chan who was the plaintiff's predecessor in title.  At that time the defendant, who is a hawker, was selling groceries in the lane at the side of Mr. Chan's shop. The defendant then wanted to change-over and sell frozen meat, but he needed somewhere to install refrigerators for storing the meat.  Mr. Chan was agreeable, and inside the shop he built an interior wall alongside and parallel to part of the exterior wall.  This interior wall enabled part of the exterior wall to be pulled down and the space thus created was let to the defendant. It could only be approached from the lane, and the defendant could use it for his refrigerators and so start selling meat in the lane. Outside the rented space and round the area where he did his business, the defendant erected a shutter or grille, which enclosed part of the lane. He has continued in business there ever since. But since building the new wall he has moved away from alongside P.W.1's shop, and erected a stall in the very middle of the lane !

8. As for the space in the wall of the shop, the defendant first got a written tenancy from Mr. Chan in 1975 for a term of 2 years at a rent of $900 p.m.  Later that same year, Mr. Chan sold the whole shop to the plaintiff company.  Subsequently the latter gave the defendant two further leases of the suit premises in 1977 and 1980, at rents of $2,500 and $3,800 respectively. This last lease is the tenancy agreement, the termination of which has given rise to the present proceedings.

9. According to P.W.1, the defendant asked for a further lease on 15th October 1982.   P.W.1 had to consult his partner and when he next saw the defendant he says he proposed a revised rent of $6,000  p.m.  Apparently, the defendant thought this was too high, and said he did not want such a lease.  So  P.W.1 told him that, if he did not want it, he should return the premises. When he next returned, he found that the defendant had wall-in the space, and was doing business in the middle of the lane. The defendant then purported to return the premises to P.W.1.  But P.W.1 says that there is no opening in the interior wall, and not even a rat can get into the premises now.

10. According to the defendant, P.W.1 never offered him a new lease.  Apparently P.W.1 simply told him he wanted to sell the place, but he gave the defendant no instructions about moving out.  On 3rd and 4th October, when P.W.1 next came, the defendant told him he proposed to build a wall along the opening of the space.  Apparently P.W.1 smiled and told him not to build it, and then walked away.  However, the defendant went ahead and spent $4,000 in building this new wall.  He says he did this, because of instructions 12 years ago from the previous owner, Mr. Chan.  When P.W.1 next came, after the new wall had been built, the defendant went through the motions of delivering-up the premises to P.W.1.  It seems to be suggested that they can be entered by a small metal door in the interior wall.

11. I find that it is not possible to gain entry through the interior wall, and in any case the shop is let out to a third party.  So this new wall has had the effect of completely sealing-in the suit premises. This has made it impossible for P.W.1 to enter and take possession.  Instead of returning the premises to the plaintiff company, the result of the defendant's action is that the plaintiff company has been prevented from recovering possession of its premises.

12. P.W.1 and the defendant both gave evidence.

13. P.W.1 got a little mixed-up as to when the various events happened in October. But he gave a good impression and he rejected the defence suggestions.

14. The defendant is sharp, and has succeeded in enclosing a large area of the side lane, which does not belong to him, and in abstracting electricity where none is supplied. He rejected the suggestions that he was irritated at being offered what he thought was too steep an increase in rent, and that that was why he built the new wall. He claims that he was simply complying with an instruction from Mr. Chan to rebuild the exterior wall of the shop. But seeing that -

I do not believe him. I do not believe that he would have built this wall at a cost of $4,000 simply to comply with instructions he had had twelve years' ago from a man who had long since faded out of the picture.

15. I find P.W.1 did offer to renew the lease at an increased rent of $6,000 p.m. I think the defendant was so annoyed by the steep rise in rent, that he adopted a dog-in-the manger approach, and decided that if he did not or could not use the space himself, he would make sure that P.W.1 could not use it or let it out to anyone else.

16. Accordingly I find that his action was directed against P.W.1; that he walled-in the space with the deliberate intention of preventing P.W.1's company recovering possession of the suit premises, and that his purported return of the premises to P. W.1 was a complete mockery.

17. Mr. T. Lai argued that the erection of the wall was only a partition, and that under para. (7) of the 1980 tenancy agreement it cannot be pulled down and that it must be returned to the landlord as a fixture.  Further, he argued that there is nothing in the tenancy agreement which prevented such a wall being built or which required any wall so built to be pulled down.

18. However the wall is an exterior wall, and not just a partition, and it has completely sealed off the entire suit premises and made it impossible to get at them.  So para. (7) does not apply.  Moreover what the defendant did was an act of voluntary waste which has caused permanent alteration to the premises to the prejudice of the landlord.   This conflicts with his obligations towards the landlord.

19. Further the fact that there is no express provision in the lease preventing him building such a wall is completely irrelevant. If the landlord had to set out in the tenancy agreement all the acts of waste which a tenant should not commit, the list would be endless and it would make the law a complete ass.

20. The building of this wall has not only prevented the plaintiff recovering possession of the suit premises, but has also had the effect of terminating their existence.

21. The plaintiff is therefore entitled both to an order for vacant possession and to an order that the defendant do restore possession of the suit premises to the plaintiff company, by pulling down and removing this wall which has sealed them up.

22. He is also entitled to mesne profits and damages. This includes the rent of the premises during which the plaintiff company has been kept out of possession - i.e. rent of $3,800 p.m. for 20 months, viz. $76,000. The plaintiff company is also entitled to forfeit the deposit of $7,200.

23. I give judgment to the plaintiff accordingly, as prayed, and grant him the costs of this action.

Representation:

Mr. Nicholas Pirie (Ho & Wong)(for the Plaintiff)

Mr. Thomas Lai (Ford, Kwan & Co.) for the Defendant