Tsang Hing Fung and Another v. Miu Yin Chi Paul
Read the full judgment text of DCCJ 4017/2001 on BabelCite. This District Court judgment was delivered on 24 July 2001.
1. The Plaintiffs are the registered owners of the premises known as Flat C on 9th Floor of Block 1 together with Car Port No. 70, Welcome Gardens, No. 39 Broadcast Drive, Kowloon, Hong Kong. By a Tenancy Agreement dated 16th September 1997 written in Chinese, the Plaintiffs as landlords let the flat and the car-parking space to the Defendant for a term of 2 years commencing from 1st October 1997 to 30th September 1999 at a rent of HK$22,000 per calendar month exclusive of rates and management f
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DCCJ004017/2001 DCCJ4017/2001 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 4017 OF 2001 __________
__________ Coram: H.H. Judge Cheung in Court Dates of Hearing: 5, 7, 9 and 10 July 2001 Date of Handing Down Judgment: 24 July 2001 --------------- JUDGMENT --------------- 1.The Plaintiffs are the registered owners of the premises known as Flat C on 9th Floor of Block 1 together with Car Port No. 70, Welcome Gardens, No. 39 Broadcast Drive, Kowloon, Hong Kong. By a Tenancy Agreement dated 16th September 1997 written in Chinese, the Plaintiffs as landlords let the flat and the car-parking space to the Defendant for a term of 2 years commencing from 1st October 1997 to 30th September 1999 at a rent of HK$22,000 per calendar month exclusive of rates and management fees payable in advance on the first day of each and every calendar month. 2.The Defendant is an architect by training. He works as an in-house architect for one of the two electricity companies in Hong Kong. He rented the premises as a residence for himself and his family, comprising his wife and two children who were 2 years old and 3 months old at the material time. According to the Defendant whose evidence in this regard I accept, starting from early January 1998, water began to drip or leak from the ceiling of the flat during or after rainfall. This resulted in several complaints made by the Defendant to the first-named Plaintiff (Mr. Tsang) over the telephone. In fact, the leakage problem was not restricted to Flat 9C which is situated on the top floor of Welcome Gardens. Similar leakage problems were also discovered in Flat A, Flat B and Flat D on the same floor. A neighbouring flat owner actually complained to the Incorporated Owners of Welcome Gardens about the problem. And the matter was discussed in a meeting of a management sub-committee of the Incorporated Owners on 20th February 1998. The sub-committee agreed that the leakage problem in the top floor flats was due to the want of repair of the main roof of the building, and agreed that immediate remedial action should be undertaken. But before it would recommend the Incorporated Owners to do so, it had to clarify the ownership of the roof first. So nothing was done in the meantime to alleviate the leakage problem. The problem in Flat C deteriorated in around the end of April and beginning of May 1998 when the raining season began. According to the Defendant, there was a serious leakage problem in the premises affecting the kitchen, the living room, and the 3 bedrooms. It is clear from the expert reports and the photographs before me that in the kitchen, there was a damp patch with paint peeling off on the ceiling, from where water dripped. Moreover, according to the Defendant and his expert (Mr. Allan Lam), the problem was not restricted to the kitchen. In the living room as well as the bedrooms, very thin layers of water moisture were found on the ceiling soffit, and moulds were also found on the walls and ceiling. The impression of the Defendant's expert who had visited the premises on 18th June 1998 was that the whole premises was in a very 'damp condition'. According to the Defendant, during heavy rainfall or immediately thereafter, the walls in the bedrooms were damp and wet, and since the beds were placed next to the walls, the beds and those sleeping on the beds were wetted due to capillary action of the water. According to the Defendant, his children got sick allegedly as a result. 3.Starting from 12th May 1998, the Defendant wrote various letters of complaint to Mr. Tsang regarding the condition of the premises. He held Mr. Tsang as the landlord liable for the condition of the premises and required Mr. Tsang to carry out immediate remedial action. He said Mr. Tsang had agreed to do so over the telephone, but nothing much or effective was done. 4.It is common ground that Mr. Tsang together with three other owners of the 9th floor flats instructed a surveyor, Mr. Dennis Wong, to inspect the 4 flats as well as the roof on 1st June 1998. So far as Flat C was concerned, Mr. Wong visited the flat, asked the occupants the location where water leaked, and was told that the problem existed in the kitchen. He went to look at the kitchen and observed that there were water drips and damp patch with paint peeling off on the ceiling in the kitchen. He did not, however, inspect the other parts of the premises. According to Mr. Wong's report made following his inspection, the leakage problem occurred after rainy days. The leaking locations were mainly found at the kitchens of the affected flats. According to Mr. Wong, rainwater most likely penetrated directly or by capillary action through the defective waterproof system beneath the tiles and the concrete slab on the main roof. Sometimes, water might seep into the weak points of the roof and could travel long distances before finding its way out even through the minutest cracks. The weakest points as revealed were the cracks at the concrete kerb, joints of the tiles, cracks at the surface channels, the defective areas of the waterproofing layer, the cracked and porous area of the cement sand screeding and concrete slab etc. Mr. Wong recommended either partial re-roofing of the leaking areas or better still, a total re-roofing. 5.It is also common ground that on 15th June 1998, Mr. Tsang instructed a contractor to apply a thin layer of waterproof coat on that part of the roof tiles immediately above the kitchen of Flat C. This, according to the Defendant and his expert, was not effective in alleviating the difficulty experienced in Flat C. As I said, Mr. Allan Lam, the Defendant's expert, inspected Flat C on 18th June 1998. Unlike Mr. Dennis Wong, he carried out a thorough inspection of the whole premises including the bedrooms. As I said, he observed that there were very thin layers of water moisture on the ceiling in the bedrooms and the living room. He observed areas of mould growth in the bedrooms and the living room. He found the flat to be in a very damp condition. He commented that he himself would not have wanted to live in such a flat. He was of the view that the temporary waterproof coating applied on the roof tiles on 15th June 1998 was not effective at all. By and large, he agreed with Mr. Wong's analysis of the cause of the leakage in the present case, but he took the view that the problem could only be solved by complete re-roofing. 6.It is clear from the correspondence that the Defendant was not satisfied with the result of the temporary remedial work done on 15th June 1998. He continued to press Mr. Tsang for taking further and more permanent remedial action. 7.According to the correspondence and the minutes of the Incorporated Owners, a notice had already been put up by the Incorporated Owners on 25th May 1998 that some remedial site action would be taken once the weather was fine. That was done pursuant to a resolution passed in a meeting of the Incorporated Owners back in April. At that time, they had also obtained a tender for carrying out the remedial work. But for some technicality, they required to obtain several more tenders. That apparently delayed the work. Moreover it should be noted that according to the evidence the weather in June 1998 was bad and no effective remedial work could be carried out under those circumstances. 8.Apparently towards the end of July, Mr. Tsang was advised by the Incorporated Owners that re-roofing to remedy the water-leaking problem would be carried out in the coming one or two weeks. This is evidenced by a letter written by Mr. Tsang to the Defendant on 28th July 1998. In fact according to the minutes of the management sub-committee of the Incorporated Owners held on 1st August 1998, they were still seeking further tenders from interested contractors, with a view to obtaining the best price for carrying out the work. 9.In the meantime, the Defendant felt that he could tolerate the situation no more, and decided to vacate the premises. This he and his family did on 27th July 1998. By a letter dated 4th August 1998, he so informed Mr. Tsang. By a separate letter dated 6th August 1998, he returned the keys to Mr. Tsang. The Plaintiffs did not accept the unilateral termination of the tenancy by the Defendant. They regarded it as a wrongful repudiation of the same. By a letter dated 12th August 1998, the Plaintiffs through their solicitors wrote to the Defendant to accept his wrongful repudiation of the tenancy agreement. The parties could not resolve their dispute, and this action was commenced. 10.In this action, the Plaintiffs claim for the arrears of rent and management fees from 1st July 1998 to 11th August 1998 when the (alleged) wrongful repudiation was accepted. The Plaintiffs also claim for various sundry expenses in arrears. Moreover, at one stage, the Plaintiffs commenced distraint proceedings against the Defendant for recovery of arrears of rent for the month of July. However, before the bailiff proceeded to distrain the premises, it came to the notice of the Plaintiffs (on 10th August 1998) that the Defendant had already vacated the premises. A sum of $4,000 being legal costs and disbursements for the distraint proceedings was incurred by the Plaintiffs. The Plaintiffs claim against the Defendant this sum of money. 11.Further, the Plaintiffs say they have incurred a sum of $3,500 to repair and repaint the wallpaper and doors which were in need of repair after the Defendant vacated the flat. The Plaintiffs also spent a sum of $6,500 on the wooden flooring, the kitchen door and the clothes drying rack as required by a new tenant found by the Plaintiffs after the Defendant left the premises, as well as removing the Defendant's cabinet left in the flat. After the Defendant moved out of the flat, the Plaintiffs managed to find a new tenant to rent the premises from 16th September 1998 at a rent of $14,280 per month inclusive of rates and management fees. In this action, the Plaintiffs therefore claim against the Defendant for the loss of or difference in rentals for the remainder of the Defendant's term of tenancy up to 30th September 1999. On top, the Plaintiffs also claim for the agency fees and stamp duty incurred in re-letting the premises to the new tenant. 12.On the other hand, the Defendant counterclaims against the Plaintiffs for their failure to remedy the water leakage problem. He counterclaims for the professional investigation fees of Mr. Allan Lam, the medical expenses for treating his children, the deposits paid under the tenancy agreement with the Defendant, a sum of $235,200 being compensation for "nuisance-free premises for remaining period of original tenancy agreement", agency fee for renting a new flat after moving out from the Plaintiffs' flat, removal expenses as well as refund of rates. Condition of the Premises 13.I accept the evidence of the Defendant and his expert Mr. Allan Lam regarding the condition of the premises at the height of the problem, i.e. between May and July 1998. The Defendant was the person who resided in the premises at the material time. He gave first-hand evidence as to what the condition of the premises was like at the time. Mr. Allan Lam inspected the premises on 18th June 1998. He inspected every part of the premises. Although the photographs he took were less than satisfactory, I have no reason to doubt the general accuracy of his report, or for that matter, his recollection of the actual condition of the premises at the time of his inspection. Like his counterpart, Mr. Dennis Wong, Mr. Lam is an experienced authorized person who has carried out many water leakage remedial work before. 14.On the other hand, Mr. Tsang only visited the premises on 10th August 1998 after the Defendant had vacated the premises. He said he did not find any leakage problem within the premises. But there is no evidence before me regarding the weather condition between late July and mid-August in 1998. Mr. Tsang said 2 days before his visit, Typhoon Signal No. 3 had been hoisted. Again I have no evidence regarding the actual rainfall brought by the typhoon. Mr. Tsang said after he re-let the premises to the new tenant, there was no complaint from the new tenant. That may well have been so but most probably this was due to the fact that from the end of August to early September, the Incorporated Owners hired a contractor to carry out rather extensive remedial work to the main roof and apparently this proved to be quite effective in rectifying the problem. By a "certificate" dated 17th April 1999, the chairman of the Incorporated Owners certified that there was no report of water leakage since the completion of the remedial work on 5th September 1998. 15.As regards Mr. Dennis Wong, as I said, he had inspected the kitchen of the flat in question in quite some detail. He had also looked at the living room of Flat 9C. But his approach was to focus on those locations were complaints of water leakage were made by the occupants. So he admitted in the box that he did not thoroughly inspect the condition in the living room. He also frankly admitted in his second report prepared for the purpose of this litigation as well as in the witness box that he had not inspected the 3 bedrooms at all. 16.The upshot of all these is that there is really nothing to contradict the direct and first hand evidence given on oath by the Defendant and Mr. Allan Lam. More importantly, I find them to be truthful witnesses in this regard. I find that the condition of the premises at the material time was that as described by them in evidence. Responsibility for the main roof 17.Who was responsible for maintaining the main roof, the lack of repair to which caused the water leakage problem in Flat C? The Plaintiffs are the co-owners of the Welcome Gardens. The Deed of Mutual Covenant in question did not give the right to exclusive possession of the main roof to any of the co-owners. The main roof is therefore a common part of the building. This also accords with the definition of "common parts" in section 2 of and the First Schedule to the Building Management Ordinance (Cap. 344). 18.Had the Plaintiffs been given the right to exclusive possession of the main roof, they would have been responsible for taking reasonable care to maintain the main roof: See for instance Orient Trading House v. Kat Tak Investment Co. Ltd. [1980] HKLR 513. However, whether they were given the exclusive right to possess the roof would not, in my view, matter. So long as they are the co-owners of the main roof, they would be under a duty, together with the other co-owners, to maintain the main roof. And if due to the lack of maintenance and repair to the main roof, an occupier of Flat C was affected by water leakage problem, they would be liable to the occupier under the general law of tort, even if they were not the landlords of the occupier. And according to Orient Trading House, as the Plaintiffs were the landlords, they would (in addition) be under a duty (under contract and tenancy law) to the tenant to take reasonable care to maintain the roof, and their failure to do so would have landed them in liability towards the tenant. 19.But the situation in the present case is different. The co-owners have incorporated themselves into an Incorporated Owners of Welcome Gardens pursuant to the provisions of the Building Management Ordinance. One of the important legal consequences of the incorporation is set out in section 16 of the Ordinance:
20.Further, section 18 (1) (a) of the Ordinance provides that: "the corporation shall maintain the common parts and the property of the corporation in a state of good and serviceable repair and clean condition". 21.Thus it is clear that after the incorporation, the Incorporated Owners has the right over the main roof and has the duty to maintain the main roof, all "to the exclusion of the co-owners" including the Plaintiffs. 22.Thus the factual distinction of the present case from a case like Orient Trading is that the water leakage problem in the present case had its source in a part of the building that was under the exclusive control and management of the Incorporated Owners, rather than the landlord. 23.As a matter of legal analysis, the present case is no different in nature from a case where water leaked from an upper floor occupied exclusively by another flat owner; or to take an extreme hypothetical example, a case where water was sprayed into the flat through its window from a neighbouring high-rising building. 24.So prima facie, the complaints of the Defendant should be directed against the Incorporated Owners. His landlords, the Plaintiffs, were like him, victims of the water leakage problem, caused by the condition of the main roof in relation to which the Incorporated Owners had the exclusive statutory right and duty to carry out the necessary maintenance and repair. Tenancy Agreement 25.If this is so, what is the possible justification for the Defendant's refusal to pay rent or his moving out of the premises without the consent of the Plaintiffs? (It should be added here that originally the rent for July was not paid. But after commencement of proceedings, the Plaintiffs obtained summary judgment against the Defendant for payment of the rent for the month of July up to 27th July 1998 when the Defendant vacated the premises together with payment of the pro-rata management fees and rates. The judgment has been satisfied by the Defendant.) 26.Can a duty to maintain the demised premises in a certain condition be made out from the landlord and tenant relationship, or can the tenant argue that the landlord was under a duty to do repair pursuant to the Tenancy Agreement? The Tenancy Agreement in question obviously did not provide for any duty on the part of the landlord to carry out any repair. So the Defendant can only succeed if he can pray in aid the general law. 27.It was accepted by Mr. Cheung, Counsel for the Plaintiffs, that the premises were let as furnished premises. In that case, there was an implied warranty that the premises were fit for habitation at the commencement of the tenancy. Mr. Cheung argued that the premises were indeed fit for habitation at the commencement of the tenancy in September 1997. The leakage problem only arose in January or February 1998. I agree with Mr. Cheung's submission. There is no or no sufficient evidence before me to suggest that the leakage problem was a pre-existing one. The evidence before me suggests that the problem only started in January 1998. In any event, there is no evidence before me that back in September 1997, the premises were in a condition as poor as that observed in May to July 1998. The Defendant, himself an architect, did not notice any problem when he decided to rent the premises. He did not make any complaint until the beginning of 1998. 28． As regards the implied covenant for quiet enjoyment, in my judgment, it does not help the Defendant either. The implied covenant would only catch acts or omissions interfering with the tenant's ordinary and lawful enjoyment of the premises by the landlord or through the lawful acts of anyone claiming through or under him or by title paramount. As I said, by law the rights and liabilities in respect of, and in particular the duty to maintain and repair, the main roof lied with the Incorporated Owners. The acts or omissions, if any, of the Incorporated Owners could not be attributed to the Plaintiffs as landlords. So this implied covenant does not assist the tenant at all. Oral agreement to repair 29.The Defendant argued that if there was no duty under the Tenancy Agreement or general law on the part of the landlord to repair, and if the general law of tort did not assist him (because only the Incorporated Owners had the rights and duties relating to the main roof), there was nonetheless an oral agreement reached with the landlords (as represented by Mr. Tsang) that the landlords would be wholly responsible for carrying out the remedial work. He relied on a series of correspondence between the parties from 12th May 1998 to 25th July 1998 before he eventually vacated the premises. In particular, the Defendant relied on a letter dated 9th June 1998 he wrote to Mr. Tsang. It referred to a telephone conversation between the Defendant and Mr. Tsang on 6th June 1998. The letter went on to say as follows:
30.Firstly, the accuracy of the above extract of what had been agreed was doubtful. In my judgment, according to the correspondence and Mr. Tsang's evidence in this regard (which I accept), there was no agreement to reduce rent or terminate the tenancy, and paragraphs (3) and (4) above were wrong in so far as they suggested that an agreement had been reached. More importantly, in my view, this letter must be read in its proper context. I shall not repeat in detail the correspondence passing between the parties, amongst which the letter of 9th June 1998 was but one. As I mentioned above, the Incorporated Owners had by a notice dated 25th May 1998 stated that it would take immediate remedial site action, weather permitting. This really, in my view, set the scene. 31． The Defendant as the tenant of the building must have been aware of the attitude of the Incorporated Owners. Moreover, this was specifically pointed out to the Defendant by Mr. Tsang in his letter dated 4th June 1998. So both sides knew that the Incorporated Owners had assumed the duty to repair the roof. This also accorded with common sense. The water leakage problem was caused by the condition of the main roof. It affected not only Flat 9C but other flats on the 9th floor as well. The main roof was not occupied or controlled by any of the flat owners in the building in question. Even to a layman, it should have been apparent that the main roof was a common part of the building under the control of the building management, i.e. the Incorporated Owners in the present case. It was simply just right for the Incorporated Owners to assume responsibility for repairing the main roof. Moreover, it must have been apparent to the Defendant that the Incorporated Owners was run by a committee and elected members. As a co-owner of the building, Mr. Tsang would have some say about how the affairs of the Incorporated Owners would be run. But that would only be an indirect and limited say in a meeting of the Incorporated Owners. Mr. Tsang by himself could not have been able to dictate what the Incorporated Owners should or should not do or when things should be done, at least in the absence of resort to legal action against the Incorporated Owners which would be a drastic step to take from any angle. Moreover, as an architect himself, the Defendant must have realised that the leakage problem in Flat C could not be eliminated by work unilaterally done by Mr. Tsang to that part of the main roof immediately above Flat C. Any work would have to cover other parts of the main roof, if not the upper extremities of the external walls of the building as well. It would not have made good or reasonable sense to require or expect Mr. Tsang to carry out the work all by himself. 32.Against all these, one should look at the alleged oral agreement. In my view, the so-called oral agreement as evidenced by the correspondence, on its proper construction and reading, was no more than an acknowledgement by Mr. Tsang that he would use his best to ask the Incorporated Owners to carry out the necessary remedial work as soon as possible and practicable. Nothing further than that was assumed or agreed to by Mr. Tsang. 33.On the evidence before me, Mr. Tsang had together with 3 flat owners on the 9th floor instructed a surveyor (Mr. Dennis Wong) to carry out an inspection of the flats affected and to prepare a report for submission to the Incorporated Owners. They had also together hire a firm of solicitors to press the Incorporated Owners for action. Mr. Tsang had retained a contractor to paint a layer of waterproof coat on that part of the main roof immediately above Flat 9C. Mr. Tsang had attended some of the relevant meetings of the Incorporated Owners. In my view, there is nothing to suggest that Mr. Tsang had not done his best to ask the Incorporated Owners to take action. 34.Moreover, even assuming that Mr. Tsang had failed to do so, that failure, in my judgment, did not cause the Defendant any loss. It is clear from the documents and in particular the minutes of the meetings of the Incorporated Owners and its sub-committee that the Incorporated Owners had a procedure to follow and adopt. They met to discuss the matter, they reviewed the complaints from the flat owners and the lawyers and the surveyors, they clarified the title to the main roof, they called for tenders, reviewed them and called for further tenders, in order to get the best possible price. They had a balancing exercise to do, i.e. balancing on the one hand the problems experienced by the affected flat owners and occupiers, and on the other the need to carry out the work as economically as possible bearing in mind that all the co-owners of the building (whether affected by the water leakage problem or not) had to shoulder the cost. In short, they took their time to consider and eventually adopt the measure to take, and moreover there was the weather condition to consider. Bearing all these in mind, even assuming (which in my judgment was not the case) Mr. Tsang did not do his best to ask the Incorporated Owners to take action, that did not result in any delay or loss to the Defendant. The matter was quite simply beyond the control of Mr. Tsang. 35.Mr. Cheung also argued that a mere agreement on the part of a landlord to do some repair work does not by itself prove that there had been a change or a transfer of the burden of repair: London Hospital Governors v. Jacobs [1956] 1 WLR 662, 637 per Lord Evershed M.R.; Halsbury's Laws of England (4th ed. reissue) Vol. 27(1) para. 328. I agree but everything would depend on the actual facts and circumstances of each case. But this does reinforce my view that in the present case, one should be very slow to conclude that Mr. Tsang had, despite the general law and the position of the Incorporated Owners, agreed to shoulder the burden to carry out the extensive work to repair. 36.Mr. Cheung further argued that had Mr. Tsang really agreed to carry out repair work to the main roof by himself, that duty would not be an absolute one. All that he was required to do would be to take reasonable care. That of course would depend on the true and proper construction of the agreement reached. But in the absence of very specific words, I would tend to agree with Mr. Cheung's submission. As pointed out in Orient Trading House, at common law a landlord is not an insurer of the safety of his tenant or his goods. Defect is not synonymous with fault. He must exercise reasonable care to see that that part of the building remaining in his possession and control is maintained in a reasonably good condition. This duty arises out of the relationship of landlord and tenant. And in the absence of a very specific wording in the alleged agreement, I would have construed the agreement to repair to be no more than an agreement to take reasonable care to do remedial work. Mr. Cheung went on to argue that his clients had discharged the duty by instructing a contractor to paint a thin layer of waterproof coat on that part of the roof immediately above Flat 9C. The more permanent remedial work was done in end of August. In my view, if Mr. Cheung were forced to argue at such a level, his clients' case would be quite problematic. It is common ground amongst the experts that the area of application of the waterproof coat was too small given the nature of the leakage. In other words, Mr. Tsang ought to have instructed the contractor to paint the layer of waterproof coat on the adjacent parts of the main roof as well as a temporary measure to prevent water from leaking into Flat 9C. Just painting that portion of the main roof above Flat 9C would not be sufficient. Water could seep into the main roof from the unprotected portions of the main roof and by capillary action find its way into Flat 9C. 37.Mr. Cheung also argued that there was no consideration for the alleged agreement given that his clients otherwise had no legal duty to carry out any repair at all. But compromising the tenant's complaints could possibly supply the necessary consideration. 38.But as I say, in my view, the true construction of the so-called agreement between the parties was no more than that Mr. Tsang acknowledged that he would do his best to ask the Incorporated Owners to carry out the remedial work as soon as possible and practicable. He did not personally undertake to do the work himself. In fact, I doubt very much whether Mr. Tsang had the right to go up to the main roof to carry out the work, in the light of sections 16 and 18 of the Building Management Ordinance. Frustration 39.This was not pleaded or argued before me. In my view, the water leakage problem in Flat 9C, though serious, did not amount to a frustrating event. The flat could still be occupied and used, and the problem was solved by early September 1998. See generally Chitty on Contracts (28th ed.) Vol. 1 paras. 24-050 to 24-053. Conclusion on liability 40.What is the result? In my judgment, the Defendant was not entitled to vacate the premises. His problem was caused by water leakage from the main roof, the responsibility to repair which lied exclusively with the Incorporated Owners. The Incorporated Owners may or may not have failed to regularly maintain the main roof, and they may or may not have delayed in carrying out remedial action. The Incorporated Owners is not before me in this action, and I say no more than what I have already said. But one thing is clear. I can find no duty on the part of the Plaintiffs, the landlords, whether under the general law, under the Tenancy Agreement in question, or under the so-called oral agreement, to maintain the premises in any condition, or to carry out the necessary repair or rectification work. This being the case, the Defendant had no right to unilaterally vacate the premises, thereby wrongfully terminating or repudiating the Tenancy Agreement. The Plaintiffs were entitled to accept the Defendant's wrongful repudiation of the Tenancy Agreement. And the Defendant is therefore liable for the legal consequences. I come to this conclusion not without some sympathy to the position of the Defendant and his family. But as I pointed out above, the responsibility for maintaining and repairing the main roof lied exclusively with the Incorporated Owners. Quantum 41.The Defendant did not dispute the amounts claimed against him in the final submission. He only disputed liability. This was confirmed twice by the Defendant to me during final submission. In any event, the Plaintiffs' claims are well supported by documents. 42.In my judgment, the Plaintiffs are entitled to claim the following items and amounts:
From it, I should deduct a sum of $21,827 being the partial summary judgment obtained by the Plaintiffs against the Defendant pursuant to Master Poon's Order. Thus the net sum is $15,774. 43.Further, the Plaintiffs are entitled to the following, namely, loss of or difference in rentals of $121,433 between 12.8.98 and 30.9.99 [$22,000 x 13 months & 19 days - $14,280 x 12.5 months (16.9.98 - 30.9.99)]; loss in rates in the sum of $4,999 between 1.10.98 and 30.9.99, and $10,634 being loss in management fees between 12.8.98 and 30.9.99. The total is $137,066. 44.Furthermore, the Defendant is liable for the agency fees and stamp duty incurred by the Plaintiffs in re-letting the premises to a new tenant in a total sum of $7,571. The Plaintiffs incurred $3,500 in making good the premises after the Defendant vacated the premises and incurred another sum of $6,500 to fix or slightly improve the premises in order to make it attractive and acceptable to the new tenant. In my judgment, the Plaintiffs had done their best to re-let the premises to the new tenant. I have no reason to doubt that the new rent reflected the then current market rent bearing in mind the downturn of the economy since late 1997. I accept that the slight improvement done to the premises was necessary in order to make the premises acceptable to the new tenant. Therefore I award the further sum of $10,000 for the repair and improvement work. 45.Thus the total amounts to $170,411 ($15,774 + $137,066 + $7,571 + $10,000). Credit should be given for the rental deposit of $44,000 paid by the Defendant to the Plaintiffs. Thus the net sum is $126,411. In other words, I give judgment in favour of the Plaintiffs against the Defendant in the net sum of $126,411. 46.I also award interest on this sum of $126,411 at a rate of 8% per annum. I do not think a higher rate of interest should be awarded in this case given that it is not a commercial case. As for the interest period, I note that a substantial part of the net judgment comprises the difference in rentals for the remainder of the original term of tenancy. Therefore interest on this portion should not begin to run, as argued by Mr. Cheung, from the date following the acceptance of the wrongful repudiation by the Defendant on 12th August 1998. By that date, the bulk of the difference in rentals had not even been incurred. For the ease of calculation, I would award interest from 1st February 1999 to the date of judgment and thereafter at the judgment rate. I choose 1st February 1999 because this is approximately located at the mid-point of the remainder of the un-expired term of the original tenancy, and the difference in rentals comprised the bulk of the judgment sum recovered by the Plaintiffs against the Defendant. 47.The result might, at first glance, seem harsh to the Defendant who and whose family had suffered because of the water leakage problem. I have already explained above the law and its application in this case. I shall not repeat myself. But it should be noted that after the Defendant moved out from the premises, he rented a slightly bigger flat at a very much reduced rate (also due to the downturn of economy). The new flat had no leakage problem. So in a sense, the result of this litigation is simply that he has to, as it were, disgorge the "gain" in rentals he thus earned after July 1998, and more or less be restored to the same position he would have been in had he not prematurely and wrongfully vacated the suit premises. Counterclaim 48.I formally dismiss the counterclaim. Costs 49.I make an order nisi that the Defendant do pay the Plaintiffs their costs of this action (including the counterclaim) to be taxed if not agreed. Either side may apply within 14 days of the date of this judgement to have the question of costs argued further before me with a view to varying it. Otherwise, the order as to costs shall become absolute upon the expiry of the 14 days period. 50.The facts, evidence, issues, and legal principles involved in this case fully justified the Plaintiffs' instruction of counsel to appear before me. I am grateful for Mr. Cheung's very thorough and patient assistance in this case. In fact he had cited to me many other relevant authorities not referred to in this judgment. They were helpful and to the point although I did not find it necessary to refer to them in this judgement. I grant a certificate for counsel accordingly.
Representation: Mr. Wallace Cheung instructed by M/s. Wilfred K.H. Lam & Co. for the Plaintiffs. Defendant, Mr. Miu Yin-chi Paul, acting in person. |
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