John Mark Essington Boulton v. Loon King Development Co Ltd
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1. On the 29th day of March, 1983 we delivered judgment on an application by the applicant tenant originally for a new tenancy under Section 117(1) of the Landlord and Tenant (Consolidation) Ordinance, Cap. 7. In the event the new rent was the only major issue disputed at the hearing. We determined the new rent at $29,000 per month exclusive of rates but inclusive of management charges. The grant and all the other terms of the new tenancy were disposed of by agreement.
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LDLA000062A/1982 Landlord and tenant - Part IV - review application to vary fair market rent and fix date of determination of the terms of new tenancy - application to adduce fresh evidence - some in existence at substantive hearing and some in existence only after hearing - whether discretion on review to allow fresh evidence - if so principles to be followed - Held: 1. Admission on review of fresh evidence in existence at both substantive hearing and only thereafter refused; 2. Where parties agreed on date of determination no power in the absence of consent to vary that date on review - Sections 119K, 119M Landlord and Tenant (Consolidation) Ordinance, Cap. 7; Section 11A Lands Tribunal Ordinance, Cap. 7. IN THE LANDS TRIBUNAL CF HONG KONG Application L. T. No. 62 of 1982
Coram: TRIBUNAL : His Honour Judge Cruden, Presiding Officer and M. W. Phillips, Esq. , Member Date: 27th day of May, 1983 ---------------------------- JUDGMENT ---------------------------- 1. On the 29th day of March, 1983 we delivered judgment on an application by the applicant tenant originally for a new tenancy under Section 117(1) of the Landlord and Tenant (Consolidation) Ordinance, Cap. 7. In the event the new rent was the only major issue disputed at the hearing. We determined the new rent at $29,000 per month exclusive of rates but inclusive of management charges. The grant and all the other terms of the new tenancy were disposed of by agreement. 2. The applicant on the 25th day of April 1983, pursuant to Section 11A of the Lands Tribunal Ordinance, Cap. 17, applied to review our decision. Section 11A provides:
3. The application for review was initially based on eleven separate grounds. A number of those raised new matters which were not placed before the Tribunal at the substantive hearing . These new matters can be divided into two categories. Some related to alleged facts which existed at the hearing but were not adduced. Others were in relation to alleged facts which have only arisen since the hearing. Counsel for the applicant indicated that she wished to call further evidence in support of these grounds. In particular the applicant wished to call its valuer who gave evidence at the earlier hearing, to produce a further report and give fresh evidence of rental market trends since the date of the earlier hearing on the 9th day of February, 1983. 4. Counsel for the applicant submitted that on a review the Tribunal had wide powers and these impliedly inoluded the power to allow fresh evidence to be called. Counsel for the respondent opposed the calling of fresh evidence. This opposition was both to evidence which existed as at the date of the prior hearing but was not called and to fresh evidence of events which had occurred since the substantive hearing. In the respondent's view a review under Section 11A is limited to a review by the Tribunal of its prior decision on the basis of the evidence actually in existence and adduced at that hearing. It was pointed out that there is no express power in Section 11A to allow fresh evidence. Further - more it was emphasised that section 11A does not empower a rehearing of a prior application but merely a review of a prior decision. Our attention was drawn to the very different provisions in the District Court where a review does extend to a rehearing. Section 53 of the District Court Ordinance, Gap. 336 includes These provisions:-
5. We note that in the Magistrates Court a similar power of review, under Section 104 of the Magistrates Court Ordinance, Cap. 227, expressly empowers the Court "to take fresh evidence." 6. We recognise that the fact that the Legislature in these three review provisions, has omitted only from the Lands Tribunal provision, the power to allow fresh evidence to be taken, strongly supports the view that the omission is deliberate and unlike the District Court and the Magistrates Court, we have no power to hear fresh evidence. Under our section 10 the Lands Tribunal also has:-
in respect of the matters enumerated therein. However, while Section 10 is a useful provision and a reflection of the unlimited jurisdiction of the Lands Tribunal in relation to the matters it is empowered to determine, it does not assist on the review issue for the High Court has no review power. 7. If on a review the Lands Tribunal were not able to allow, in the appropriate circumstances, fresh evidence to be called, it is possible to envisage cases where the Tribunal's review function might be frustrated and justice not done. We would therefore only come to that conclusion with reluctance. In the present case, for reasons which will shortly appear, we do not have to come to a final ruling on this issue. For we are prepared to deal with the application to call fresh evidence by assuming, without deciding, that we have the power to allow fresh evidence. 8. On that basis we will turn to consider the nature of the fresh evidence sought to be adduced. We will first consider that portion of the fresh evidence which relates to events which have occurred since the prior hearing. This mainly concerns the trends of the property market since the hearing. In this application the parties agreed to a new tenancy of 2 years 8 months from the 1st day of October 1982. The valuers for both parties gave their evidence on the fair market rent prevailing as at the 1st day of October 1982. That fact, which is clearly established by the evidence, is also reflected in our judgment at, inter alia, page 3:
For completeness we recognise that Mr. Moffoot's reference had a twofold relevance, namely that the date of commencement was within 1 month of the date of commencement of the new tenancy and that both properties had unrenovated Kitchens. We confirm that the parties at the prior hearing proceeded on the common basis that the fair market rent was to be assessed as at the 1st day of October 1982 and we determined the rent as at that date. As a matter of fact, evidence of rental trends after the hearing from February 1983 to May 1983 would be of little value in determining a fair market rent as at the 1st day of October 1982. Although we accept. that in determining a fair market rent, we are entitled to the benefit of both hindsight and foresight where, at a hearing, that is available. As the hearing was 4 months after the date on which the fair market rent was to be determined, we have already had the benefit of both hindsight and foresight. There must be an end to litigation and the review power is not inconsistent with that principle. Where a property market is as volatile as Hong Kong, it would further complicate, prolong and add uncertainty to the Tribunal's task, if each decision was subject on review to fresh evidence of post-hearing market trends. Perhaps in very exceptional circumstances a Tribunal might be prepared to allow such evidence. In the present case there are clearly no such exceptional circumstances and we decline to allow fresh evidence of post-hearing facts to be adduced. 9. As to whether we should allow fresh evidence of facts available but not called at the hearing, the legal position is a little different. In the High Court, while there. is no power to review, there are the well established principles by which, on appeal, fresh evidence may be allowed. These principles are collected in 1 'The Supreme Court Practice 1982' under R. S. C. Order 59 Rule 10/6, at page 943, which after noting that a litigant is not to be deprived of a judgment already obtained Without very solid grounds, continues:-
It is proper that the Lands Tribunal, on the assumption that we have power to allow fresh evidence to be adduced under Section 11A, should exercise its discretion rather more liberally than would a Court of Appeal Nevertheless the appellate principles we have referred to are a useful basis on which to approach any application and a reminder that our discretion should be exercised judicially and with care. 10. To return to the grounds for review, Grounds 3, 6 and 11 raise wholly or in part post-hearing facts and we are not able to consider them as they would first require fresh evidence to be adduced. Ground 8 would require fresh evidence to be called of a letter received by the applicant on the 7th day of July 1982 which was 7 months before the hearing. In accordance with the criteria referred to under the note to R. S. C. Order 59 Rule 10/6, this fresh evidence would not be admitted in the High Court for it was known to and in the possession of the applicant well before the date of hearing. We are equally satisfied that, even adopting a more liberal attitude in favour of the applicant, no adequate reasons have been advanced why we should at this stage, allow that fresh evidence to be called on Ground 8. We therefore, again on the assumption that we have the power to allow fresh evidence on a review, decline to permit the applicant to adduce fresh evidence on Ground 8. 11. The review is therefore limited to a review on the evidence already adduced at the prior hearing. By analogy with appellate procedure, this then is a review on the documents without any further evidence been called. However, our discretion on this review is the same as we possessed at the earlier hearing. We therefore have a full and unfettered discretion to reverse, vary or confirm our judgment of the 29th day of April 1983 herein. The only limitation goes not to our discretion but to the facts on which that discretion has to be judicially exercised. Those facts are limited to the facts already adduced at the prior hearing. 12. On this basis, the review is now based on the remaining grounds: -
In view of our ruling against fresh evidence, we record that the only renovations we are able to take into account are the renovations to the kitchens and exterior redecoration affecting those 4 comparables, which did not affect the subject property. 13. We confirm that we expressly took into account the particulars of House 4 at $28,000 and the other Trutle Cove Villa units let at $28,000, $31,000, $31,000, $31,000. We shared the applicant's valuer's view that House 4 was of particular relevance as apart from the similar commencement date it was one of a minority of Turtle Cove Villa comparables which, like the subject property, had an unrenovated kitchen and unredecoratod exterior We did not accept that direct weight should be given to the rentals of $31,000 for the renovated Turtle Cove Villas cited. by the respondent. Nor did the respondent even make that submission. That submission was not open to the respondent for, as we expressly mentioned at page 3 of our judgment, its valuer himself adjusted that higher rental down to $30,000, in order to make allowance for the difference in kitchen standards. 14. The close similarity of rentals of all the Turtle Cove villas was well established on the evidence. The similarity was even greater than the bare recital of the commencing rentals suggests. For the lower rental for House 2 of $28,000 was not a flat rental of that monthly sum for the full term of the 3 year tenancy. For as was established in evidence, House 2 was in fact let at $28,000 for only the first 18 months of that duration with a mandatory increase to $31,000 for the remaining 18 months. This produces an average monthly rent for House 2 of $29,500. We were informed from the Bar that a similar position exists in relation to House 4. We have no evidence on that point and therefore do not give that information in relation to house 4 any weight. 15. Before determining that the rent for the whole 2 years 8 months of the subject premises should be $29,000, we considered it desirable to test the expert evidence relating to the subject premises, not only against the other Turtle Cove Villas but because of their very similarity, also against other comparable premises. Our reasons for doing so, as mentioned in our prior judgment, were those set out in some detail in Towers Perrin Forster & Crosby Inc. v. Suvindra Ltd. L. T. No. 57/82. 16. The evidence of the applicant's valuer was most helpful to us in this regard, for he had undertaken a similar exercise in the Stanley area. Among other comparables he referred us to the Grosse Pointe Villa property the subject of the latter decision. We considered that it was inferior flat to the subject property in a number of respects. It was a duplex which generally are of lesser value than townhouses of the type at Turtle Cove Villas; it did not enjoy the Turtle Cove villas advantage of a communal swimming pool. The more convenient position of Grosse Pointe Villa to Stanley and other amenities was only a minimal and certainly far from being a major compensating factor. We considered that the subject property was at least $1,000 per month more valuable for rental purposes than the Grosse Pointe Villa property. Indeed, we recognise that it could well be argued that the Turtle Cove villas property was even more superior to the Grosse Pointe Villa Property. We found this comparison a useful check on the other comparables within Turtle Cove Villas. 17. We also had before us and considered the difference in garden areas of the subject property and House 4 and took that difference together with other factors into account. On this same issue we were also obliged to remind ourselves that the prevailing rents of Turtle Cove Villas did not reflect any difference related to the varying areas and access of their respective gardens. Houses 16 and 18, which are only separated by the subject property, each have very similar gardens and access to that of the subject property. Both Houses 16 and 18 are let for $31,000. 18. We confirm that in determining fair market rentals we continue to assume a degree of bargaining on the part of an applicant as explained in Union Carbide Asia Ltd. v. Hong Kong Land Co. Ltd. L. T. No. 17/82. On this issue the applicant mistakenly referred to Union Carbide Asia Ltd. v. United French Film Ltd. L. T. No. 49/82. The latter case deals only with the quite different and unrelated issue of the proper date on which to determine the fair market rent .It is true that we did not expressly refer to the former case. However, now that the basic principles of Part IV seem to be tolerably well established, we have no desire to embark in each successive judgment on an exhausting and certainly unnecessary review of all the possible principles involved. 19. As to the initial criticism by Counsel for the applicant that we gave excessive weight to the evidence of the respondent's valuer that the lower rent of House 4 was due to the alleged above average bargaining skills of the tenant we would make two comments. First, while there was no evidence whether the tenant of House 4's exceptional skill was a factor in securing a lower rental than $31,000, that statement was tendered by an expert witness as an opinion and was admissible. As the expert witness did not support that opinion with evidence, it was an opinion to which we were entitled to give little or no weight. Secondly, that was precisely the attitude we adopted and that is what we hoped to convey by implication, in terms not intended to be discourteous, when we recorded that we gave "due weight to that opinion". Counsel for the applicant on the review, having this drawn to her attention, did not pursue further the original Ground 3. 20. We would also record that we have taken into account that the 3 year lease of at least one of the comparables, included a provision in favour of the tenant for prior termination, but the new 2 years 8 months lease of the subject premises includes no such right. We further record that no such right was sought by the applicant before us. 21. We were also asked in the written application for review to order that the date of this review judgment should also be "the date of determination of the terms of the new tenancy" for the purposes of Section 119M(2). We uphold the respondent's submission that the request was misconceived for that sub-section only applies where the Tribunal orders a new tenancy. Here we only determined rent, for the parties were agreed on the grant of the new tenancy, its duration, date of commencement and other terms. Even if We had the power to do so it would, in the absence of consent, on the instant facts, be against the clear spirit of the Ordinance and contrary to the parties own agreement to order a later and different date. We decline to do so. 22. Having reconsidered the evidence adduced at the earlier hearing in the light of Counsel's submissions on the review and having considered a post-review hearing letter from the applicant's solicitors dealing with certain evidential matters, we confirm, for the foregoing reasons, our prior order namely that the new rent shall be $29,000 per month, exclusive of rates but inclusive of manage-ment charges. There will be no order as to costs. 23. DATED this 27th day of May, 1983.
Representation: Mrs. L. Jackson-Lipkin instructed by Slaughter & May for the applicant. Mr. J. Tse of K. K. & Winston Chu for the respondent. |