John R. Mcdonald v. Chan King Luen

LDLA000023A/1983

Landlord and tenant - Part IV - grant of new tenancy - back-dating of new rent to date when current tenancy terminated - unless otherwise agreed new statutory date for determination of new rent applies irrespective of date of commencement of new tenancy - Sections 1 15, 119, 119A, 119M, 119M and 119N Landlord and Tenant (Consolidation) Ordinance, Cap. 7.

IN THE LANDS TRIBUNAL OF HONG KONG

Coram: TRIBUNAL: His Honour Judge Cruden, Presiding Officer and M.W. Phillips, Esq., Member.

Date: 13th day of October, 1983

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JUDGMENT

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1. This is an application pursuant to Section 117 of the Landlord and Tenant (Consolidation) Ordinance, Cap. 7 by the applicant tenant for a new tenancy of the domestic premises situated at No. 8 Cooper Road, Ground Floor, Jardine's Lookout, Hong Kong.

2. The applicant originally entered into possession of the premises under a tenancy agreement with the respondent landlord for a period of 12 months from the 10th day of January 1972 at a rent of $5,000 per calendar month exclusive of rates. The tenancy agreement included a right of renewal for further periods of 12 months which has been exercised annually thereafter. The current rent is $7,320 per calendar month exclusive of rates.

3. At the beginning of the hearing we were informed that the parties were agreed that the new tenancy should be for a duration of 2 years; that the deposit formerly payable under Clause 2(c) of the current tenancy agree-ment should be for a sum equal to 2 months new rent; that the new tenancy should otherwise correspond with the terms of the current tenancy agreement except that the right of renewal under Clause 4(h) thereof should be deleted.

4. The major items in dispute were therefore the date of commencement and the rent for the new 2 year tenancy.

Date of commencement

5. The applicant in his notice of application applied for the new tenancy to commence on the 10th of November 1983. The respondent in his notice of opposition did not agree to that proposed date. However, in his final submission, Counsel for the respondent informed the Tribunal that in view of the previsions of Section 119M(4), the respondent would no longer object to the date of commencement being the 10th day of November 1983 as the tenant would, in any event, by virtue of Section 119M(4), be obliged to pay the new rent from the 9th day of July 1983 being the date on which the current tenancy would, apart from Section 119N, have come to an end.

6. That submission removed any disagreement as to the date of commencement. Accordingly we order that the new tenancy of 2 years duration shall commence on the 10th day of November, 1983. The rent payable from the 9th day of July 1983 to the 9th day of November 1983 is prescribed by Section 119M and it is therefore unnecessary for us to make any separate order thereon.

New rent

7. Although the new tenancy, by agreement, commences on the 10th day of November 1903 the new rent in this particular case has to be ascertained as at the 9th day of July 1983. This position arises from the fact that by virtue of the recent amendment to Section 115, under the Landlord and Tenant (Consolidation) (Amendment) Ordinance No. 2983 which came into force on the 10th day of June 1983, the definition of the new rent to be determined for a new tenancy is now as follows:

8. This is not a case where the parties have agreed to any different date on which the new rent is to be ascertained. The applicant asks that the new rent be determined as at the 10th day of November 1983. The respondent submits that the new rent is to be determined as at the 9th day of July 1983. Leaving aside the case where there is clear agreement by the parties to the contrary, the result of the Amendment is that the Ordinance now expressly stipulates that whatever the date of commencement of a new tenancy, the new rent is to be determined as at the date on which, ignoring any interim continuance under Section 119N, the current tenancy would have come to an end under, on the instant facts, Section 119(1).

9. Under Section 119(1) it was common ground that the respondent landlord had given notice terminating the current tenancy as at the 9th day of July 1983. Accordingly the new rent for the new tenancy commencing on the 10th day of November 1983, is to be determined as at the 9th day of July 1983. As we have already observed, the backdating of the new rent under Section 119M(4) means that the same new rent is statutorily back-dated to cover the whole of the interim period from the 9th day of November 1983 back to the 9th day of July 1983. So for practical purposes, the new rent, determined as at the 9th day of July 1983, applies during two separate periods. First, during the period of interim continuance from the 9th day of July 1983 to the 9th day of November 1983. Secondly, during the duration of the new tenancy commencing on the 10th day of November 1983 for a period of two years. For the period of interim continuance the new rent applies automatically by virtue of the operation of the statutory provisions of Section 119M(4). Subsequently for the duration of the new tenancy, the new rent applies pursuant to the order of the Tribunal.

10. We now turn to determine the prevailing market rent of the subject premises as at the 9th day of July 1983. The subject premises comprise a ground floor flat in a converted early post-war two storey residence at No. 8 Cooper Road, Jardine's lookout, Hong Long, Island. The subject premises have the exclusive use of a large garden. There are two other flats in the building.

11. Jardine's Lookout is quiet residential locality, bounded by Tai Hang Road, Perkins Road and Mount Butler Road, of what were formerly low rise single unit dwellings. As with the subject premises, a number of the houses have been converted into flats. Others have been redeveloped as townhouses. There are also some high rise developments on the perimeter of the area.

12. The subject premises are part of a building about 30 years old which was converted into three flats in about 1970. The subject premises have an area of about 250 square metres (about 2,700 square feet). The garden and patio area is about 480 square metres (5,000 square feet).

13. The applicant's valuer, Mr. T. Lo, submitted a report supporting a rental value for a 2 year tenancy at $21,000 per month exclusive of rates and any maintenance charges as at 26th August 1983. He adjusted this figure to $21,420 per month as at the 9th day of July 1983. The applicant himself personally suggested that something in the region of $22,000 per month exclusive of rates would be reasonable. The respondent's valuer, Mr. M.J. McGuire, assessed the rent in July 1983 at $26,000 per month exclusive of rates and maintenance charges for a duration of 2 years. It was agreed that the tenant should be responsible for the maintenance of the garden.

14. Mr. Lo based his assessment on two comparables. One was a townhouse at No. 67 Perkins Road let from 1st April 1983 for a duration of 5 years, at a rent of $23,000 per month for the first two years and thereafter at $25,000 Per month. The other was a nearby thirteenth storey flat in a building known as Butler Tower at 3 Boyce Road. This flat was let at $13,500 per month exclusive of rates and management charges from February 1983 for a duration of 2 years.

15. Neither of these properties is really comparable with the subject premises. Far better comparables were submitted by Mr. McGuire who relied on two ground floor flats which had been created by the conversion of former single residences. Each of these flats had the use of a large garden although shared with another tenant. Mr. McGuire also listed the letting of the triplex flat in the subject building which showed a rent of $22,000 per month exclusive of rates and management charges from the 20th day of January 1983 for a period of 3 years. That flat also has the exclusive use of the roof.

16. The second comparable in Mr. McGuire's list was a ground floor flat at No. 18 Perkins Road let at a rent of $22,000 per month exclusive of rates and management charges for a period of 2 years from the 1st June 1983. The area of the flat is 2,655 square feet and the garden, although shared with the only other tenant on the 1st floor, is at the rear of the premises and adjoining the patio. The building was also formerly a two storey single residence of about the same age as the subject premises.

17. Mr. McGuire's fourth comparable at No. 2 Henderson Road was also a ground floor flat in a two storey residence converted into two flats. Each of the two flats shares the use of the garden as well as a swimming pool. This comparable was also of a similar age to the subject premises but had a larger area of 3,370 square feet and was let at $34,000 per month for 2 years from 1st August 1983. This comparable appeared to be in better external condition than the subject premises as well as being superior in other respects. In addition to having a larger area it had the use of a swimming pool and enjoyed a view of the harbour.

18. We accept the applicant's submission that Mr. McGuire's second comparable at No. 18 Perkins Read was the most relevant. We have given weight to that comparable together with the other. supporting evidence and have made allowance on the one hand for the fact that the applicant enjoys the exclusive use of the garden but on the other hand has inferior car accommodation.

19. After taking all these factors into account, we have arrived at the conclusion that the subject premises might reasonably be expected to be let at $23,000 per month exclusive of rates and management charges. We therefore grant a new tenancy for a duration of 2 years from the 10th day of November 1983 at a rental of $23,000 per month exclusive of rates and management charges. There will be no order as to costs.

DATED this 13th day of October, 1983.

Representation:

Mr. B.K. He instructed by Fairbairn & Kwok for the applicant.

Mr. Robert Tang instructed by Yu, Tsang & Loong for the respondent.