Fung Man Chee v. Ting Kam Kwan

HCA001692/1970

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

Action No. 1692 of 1970

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Coram: Briggs J. in court.

Date of Judgment:

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JUDGMENT

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1. On April 16th I gave judgment in this action in favour of the Plaintiff. At the time I said I would reduce the reasons for my judgment into writing, which I now do.

2. The Plaintiff at all material times was the registered owner of certain premises, i.e. the ground floor of No. 68 CHOI HUNG Road, San Po Kong, Kowloon. It is agreed between the parties that the Landlord and Tenant Ordinance does not apply to these premises.

3. The Plaintiff leased these premises to the Defendant for a fixed term of five years commencing on September 1st 1965. The rent was $740 per month which was to be paid monthly in advance on the first day of each calendar month.

4. On July 24th 1970 the Plaintiff through his Solicitors reminded the Defendant that the lease would expire by effluxion of time on August 31st 1970 and warned him that the Plaintiff required the use of the premises as from that date.

5. The Defendant did not pay any attention and remained in possession. Indeed he is still in possession. On September 22nd 1970 he tendered a check for $740 for the rent for the month of September 1970 through his Solicitor. This was refused by the Plaintiff who commenced these proceedings for recovery of possession and mesne profits in October 1970. The Defendant filed a written defence. In this he admits that there was a lease of the premises for five years but claims that the parties agreed orally that the Defendant should have the option of a lease for a further term of five years. The Defendant alleged that he had exercised or purported to exercise that option by notice on July 31st 1970.

6. The Defendant in his defence also claimed the protection of the Tenancy, Prolonged Duration Ordinance.

7. Finally he alleged that what he termed the notice to quit was bad.

8. I will take these points in the reverse order. There was no notice to quit. The letter sent by the Plaintiff to the Defendant dated July 24th 1970 was only a reminder that the lease was due to expire on August 31st 1970. By common law it is unnecessary to serve a notice to quit of a lease which is expressed for a certain number of years. Such a lease expires without any such notice upon the relevant day, the last day of the lease, being reached. There is nothing therefore in this point.

9. As to the second point. The Defendant in the witness box told me that he had given the Plaintiff $10,000 as construction money on two occasions i.e. $20,000 in all. The inference was that because of this the lease came within the ambit of the Tenancy, Prolonged Duration Ordinance.

10. The Plaintiff denied that he had received any construction money from the Defendant. I find it unnecessary to decide whether in fact any such moneys were paid. For it is obvious from the wording of section 5(2)(a) of the Ordinance in question that that Ordinance does not apply in this case. That paragraph reads as follows:-

"This Ordinance shall not apply to any tenancy in writing or evidenced in writing for a term being a term of more than one month...."

11. The lease of the premises the subject matter of this action has been exhibited. It is in writing signed by both parties. It is a lease for more than one month: it is a lease for 5 years. It does not matter whether construction money was or was not paid. The Ordinance does not apply. If authority is required for this statement it will be found in KWAN NGAN v. CHUN KWUN YUK (HKLR 1964 at page 439).

12. There remains the defendant's claim that there was an oral agreement for a renewal of the lease. The Plaintiff denies that this was agreed. And the lease itself makes no reference to my option to renew. The Defendant agreed with a suggestion from the Court that what really occurred was that the parties, at the time of the execution of the lease or at about that time, agreed that it was possible that the lease would be renewed: but that nothing definite was decided between them. I find against the Defendant on this point also therefore. At the trial the Defendant was not represented. He conducted his case with considerable aplomb and in court he raised another defence. Though this was not pleaded, and though his pleading had been settled by a solicitor, I allowed him to raise this new defence.

13. It was this: that in January 1968 the Plaintiff reduced the rent from $740 to $700 per month. The Defendant said that at that time the parties agreed that the old lease was to be considered as having been cancelled: that a new lease would be prepared. This new lease was to be for a period of 5 years and at a rental of $700, not $740 per month. He said he had repeatedly asked the Plaintiff to prepare a lease in these terms but the Plaintiff had neglected to do so.

14. This was denied by the Plaintiff in toto. As I have no hesitation in rejecting this new defence of the Defendant.

15. Not only was this defence not pleaded, it came to the fore very late. If it were true, there would seem to have been no reason why the Plaintiff should have denied it. It is notorious that tenants in 1968 when the alleged negotiations occurred were not all that easy to come by.

16. Further the Defendant said that he was to be responsible for the expenses of preparing and executing such a lease. Why did he not go ahead and have a lease prepared? He knew what to do because the original lease had been prepared in a solicitor's office. However, nothing was done.

17. The Plaintiff said that the Defendant was tardy in the payment of his rent. The lease provided for payment on the first of each month in advance. However, the Defendant was often in arrears. So, the Plaintiff said, he agreed to accept $700 in lieu of the $740 stipulated in the lease, if the Defendant paid his rent before the 10th day of the month. Rent receipts were produced to the court which show that for a considerable period of time $700 was accepted as the monthly rent and not $740. However there are some receipts for $740 for particular months.

18. I accept the story of the Plaintiff that there was no reduction of rent to $700 but that this agreement was that if the Defendant paid within 10 days he need only pay $700 instead of $740. This is shown by the fact that on several occasions after the alleged reduction of rent to $700 the Defendant is found to have paid $740. The Defendant gave a very feeble reason for this. He said that the Plaintiff asked him for $740 on some occasions when business was in a flourishing state! And he paid. I cannot accept such a feeble explanation. In addition when ...(illegible) the rent through his solicitor for the month of September 1970, the month after the termination of the lease, the sum of $740 was tendered as the rent. This would have been $700 had the Defendant's story been correct.

19. It follows therefore that I am satisfied that there is no merit in the Defence in this case. And that there must be judgment for the Plaintiff.

20. This will be an order for possession of the premises by the Plaintiff which order is to be stayed until June 30th 1971. Mesne profits at the rate of $740 per month for the 1st September 1970 until the end of March 1971 must be paid by the Defendant within 14 days from April 16th 1971. Mesne profits for the months of April and May 1971 are to be paid monthly on the last day of each month at the rate of $740 per month, if the Defendant remains in possession for that period of time.

21. The Plaintiff is to have his costs.

Representation: