Chun Kin Ming v. Sandra Mary Elizabeth Dias
Read the full judgment text of LDPD 1650/2005 on BabelCite. This Lands Tribunal judgment.
1. The Applicant is the landlord of the suit premises known as Flat 9F, Block 3, Hong Kong Gold Coast, Phase 1A, Tuen Mun, NT (“the Premises”) whilst the Respondent the tenant of the Premises under a 2-year tenancy agreement dated 25 April 2005. The Applicant filed on 18 June 2005 an application for possession of the Premises on the ground that the tenancy expired by effluxion of time/expiration of one month’s notice. The Respondent did not file any notice of opposition. The Applicant subsequ
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LDPD 1650 OF 2005 IN THE LANDS TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION ldpd Application No. 1650 of 2005 _______________ Between
_______________ Coram: Mr. W. K. LO, Member of the Lands Tribunal Date of Hearing: 7th November, 2005 and 9th December, 2005 Date of Decision on Review: 5th January, 2006 _________________________________ D E C I S I O N O N R E V I E W _________________________________ Background 1.The Applicant is the landlord of the suit premises known as Flat 9F, Block 3, Hong Kong Gold Coast, Phase 1A, Tuen Mun, NT (“the Premises”) whilst the Respondent the tenant of the Premises under a 2-year tenancy agreement dated 25 April 2005. The Applicant filed on 18 June 2005 an application for possession of the Premises on the ground that the tenancy expired by effluxion of time/expiration of one month’s notice. The Respondent did not file any notice of opposition. The Applicant subsequently filed on 30 June 2005 an application for default judgment, which was granted by the Tribunal on 11 July 2005 pursuant to Rule 15 of the Lands Tribunal Ordinance. The Applicant later applied for a writ of possession, which was also approved by the Tribunal. The writ was issued on 19 July 2005 following which the Bailiff’s Office took steps to enforce the writ for the Applicant. 2.The Respondent issued an ex parte summons application on 4 August 2005 seeking an interim stay of writ of execution as well as the setting aside of the Tribunal’s default judgment of 11 July 2005. I heard the summons application on 12 August 2005 and decided to grant the interim stay of execution, as well as giving the Respondent leave to file and serve a Notice of Opposition within 14 days. The application to set aside the Tribunal’s default judgment of 11 July 2005 was adjourned. Subsequently, the Respondent applied twice for leave to extend the deadline for filing to the Tribunal her Notice of Opposition. Although I granted her leave to file her Notice of Opposition by 9 September 2005, she never filed that with the Tribunal. 3.On 6 October 2005, I continued to hear the Respondent’s said application to set aside the default judgment of 11 July 2005. At the end of the hearing, I gave the following orders (the translation of which is as follows): -
4.The Applicant applied to the Tribunal on 6 October 2005 for leave to issue the Writ again, which was approved on 10 October 2005 following which the Bailiff’s Office took steps to enforce the Writ. Then, on 4 November 2005, the Respondent made another ex parte summons application seeking interim stay of execution of writ of possession as well as seeking time to apply for review of my orders dated 6 October 2005. I heard this application on 7 November 2005 at the end of which the Respondent requested to defer her final submission as she was under immense pressure to prepare for her CFA examination. She agreed to pay all rent/mesne profits at the rate stated in the tenancy documents up to the date of my decision on her review as there was never any intention of her to avoid payment or to delay the matter unnecessarily. At the end, I agreed to allow for further stay of execution to 7 December 2005 as well as to defer judgment pending the filing of written final submissions by the parties on or before 21 November 2005. 5.The Applicant and the Respondent faxed their written final submissions to the Tribunal on 29 November 2005 and 24 November 2005 respectively. Also, the Respondent made a further ex parte summons application on 7 December 2005 seeking further interim stay of execution as the previous interim stay expired on 7 December 2005. After hearing the parties on 9 December 2005, I allowed the application to stay until 31 December 2005. Then, I granted a further stay up to 5 January 2006, i.e. the date of this written decision on the review, which summarizes the case and set out my reason for the decision. The payment situation 6.Under the tenancy documents, the Premises was let for a term of 2 years from 1 May 2005 at a monthly rent of $6,800. However, it was agreed that the rent would be reduced to $4,000 per month for the period from May 2005 to December 2005 (i.e. during the period of “external wall tiles replacement works”). 7.It was noted that the Respondent has paid to the Applicant, either directly to the Applicant or through the Tribunal, for the period up to and including 31 December 2005 at the rate of $4,000 per month. The last payment by the Respondent was made to the Tribunal on 7 December 2005 for the rent/mesne profits for the month of December 2005. Main issue of the Review before the Tribunal 8.During the review hearing of 7 November 2005, it was clear to the Tribunal that the main issue was whether the Applicant as the landlord was entitled to serve a notice of termination at any time of the 2-year tenancy, pursuant to the break clause at Clause No. 4 of Schedule 2 of the written tenancy agreement dated 25 April 2005 (copy of which was produced as Exhibit A1). The said clause reads,
9.There was no dispute between the parties on the genuineness of the said Exhibit A1 including the above said clause. The word “ONE” was filled in by the Applicant twice in the two underlined spaces while the space in between the bracket [ ] was left blank. Both parties also agreed that they knew each other through a notice posted up by the Applicant on a supermarket notice board in the estate where the Premises was located. They did not use the service of any estate agent and all the documents of the subject tenancy were prepared by the Applicant, based on a pro-forma Tenancy Agreement obtained by the Applicant, and all the documents were agreed by both parties before signing. The documents of the subject tenancy included the following: (i) the provisional agreement dated 23 April 2005, the supplementary agreement also dated 23 April 2005 and (iii) the tenancy agreement dated 25 April 2005 (which in fact included a copy of the said provisional tenancy agreement as well as a copy of the said supplementary agreement), and a reference to these 2 documents was also made in Clause 5 of the Schedule 2 attached to the tenancy agreement dated 25 April 2005. 10.There was no dispute between the parties that there was a rent-free period from 23 April 2005 to 30 April 2005, before the commencement of the term of the tenancy on 1 May 2005. It was also common ground that the parties had disputes on the condition of the air-conditioners installed in the Premises which eventually led to the issue of the letter dated 15 May 2005 (i.e., notice of termination) served by the Applicant to the Respondent. During the hearings, the Tribunal explained to the parties that their disputes over the provision of the air-conditioners and the air-conditioning condition were not issues that would be determined by this Tribunal. The parties understood this point as a result of which during the review hearing on 9 December 2005 as well as in the written submissions filed by the parties, they concentrated solely on the issue of the interpretation of the tenancy agreement with special attention to the true meaning of the break clause. The Applicant’s case 11.The Applicant’s case was that the parties agreed to leave the bracket [ ] blank and the Tribunal should read the meaning of the clause as it was so stated in writing. Therefore, since there was no stipulation that the written notice shall not be served before the expiration of a certain month of the term of the 2-year tenancy, i.e., not earlier than a certain date, the Applicant did comply with the meaning of the clause in choosing, by way of a letter dated 15 May 2005 (copy of which produced as Exhibit A8), to serve by post to the Respondent a one month’s notice of termination in writing. It was the evidence of the Applicant that a SMS message was also sent to the Respondent notifying her of the service of the notice of termination dated 15 May 2005, and that the Respondent replied to him by a message on the same date. The Applicant produced the details of the SMS messages exchanged between the parties as Exhibit A9. The Applicant said that since the Respondent did not give back vacant possession of the Premises to him after the date of termination of the tenancy stated in his notice dated 15 May 2005, he applied to the Lands Tribunal of possession on 18 June 2005. The Respondent’s case 12.On the other hand, the Respondent alleged in her evidence that she was misled by the Applicant in agreeing to sign the tenancy agreement with no stipulation in the earliest possible date of service of the break clause by either party in clause No. 4 (Break Clause) of Schedule 2. The Applicant misled her by stating that with the amendment of the Landlord & Tenant (Consolidation) Ordinance in 2004, there was no need for the parties to state the earliest date in the said clause. However, she later discovered from other tenants that notwithstanding the said amendment of the laws affecting domestic tenancies in Hong Kong, most tenancies with such break clauses were still invariably bound by the proviso that no such termination should be made within the first 12 months of a usual 2-year tenancy term. The Respondent also stated that she had made it very clear to the Applicant that she needed at least a one year fixed term contract because she was, prior to the signing of the tenancy agreement, preparing for an important professional examination scheduled on 4 December 2005. She produced documentary evidence in support of her enrolling for the said CFA examination. She also planned to take an extended vacation abroad after the examination, leaving all her belongings in the Premises in Hong Kong before returning here to find a new job. Because she quitted her job to prepare the said examination, she was therefore admittedly looking for a budgeted dwelling. The Premises suited her because the Applicant as the landlord agreed, in view of the poor environment cause by external renovation works, to reduce the rent from the sum of $6,800 to $4,000 for the period from May 2005 to December 2005, as clearly set out in Clause 1 of the Supplementary Agreement, which reads,
13.The Respondent also gave evidence that it did not make sense for her to have agreed a 2-year term, which however is then subject to a break clause option that could be exercised by the landlord anytime after the commencement of the tenancy on 1 May 2005. She would have never agreed such terms bearing in mind that she had to bear the risk, the trouble and the costs of finding accommodation and moving within such a short span of time. 14.The Respondent submitted that notwithstanding clause 4 of Schedule 2 of the tenancy agreement, the Tribunal was asked to find that the tenancy agreed by the parties was indeed for a fixed term of at least 12 months and that the Landlord/Tenant/either party shall be entitled to serve a notice of termination by giving to the other side not less than one month’s written notice or one month’s rent in lieu of notice but such notice shall not be served before the expiration of the 12th month of the term of tenancy, i.e. not earlier than 30 April 2006. As such, the notice of termination, which was purportedly to have been served by the Applicant, was invalid as it was served to the Respondent by a letter dated 15 May 2005 sent by ordinary post by the Applicant. Therefore, the Applicant’s application should be dismissed. The effect of the notice of termination dated 15 May 2005 15.Having regard to all the evidence adduced by the parties, I find that the Applicant did serve by post the said notice of termination (copy at Exhibit A8). In particular, the date of the letter was stated as 15 May 2005 and in paragraph 2 of the said letter, it was stated,
16.Therefore, if the Tribunal finds that the effects of the tenancy agreed by the parties is that the Applicant as the landlord could exercise his option to terminate the tenancy at any time during the continuation of the 2-year fixed term provided that the landlord gives a month’s notice in writing or to give a month’s rent in lieu of notice, then the above letter of termination dated 15 May 2005 does fulfill the requirement of the notice of termination. As a result of this, the Applicant’s application should succeed and the Respondent’s review should be dismissed. On the contrary, if the Tribunal is with the Respondent, then the Applicant’s application should be dismissed. Findings of the Tribunal 17.The term of the tenancy of the suit Premises was very clear. It was for a 2-year term commencing from 1 May 2005. What was not so clear was the exact meaning of the break clause in the tenancy agreement signed by the parties on 25 May 2005, including the intention of the parties behind when drawing up and agreeing this term. The break clause was so ambiguous that I would make my findings below. 18.Having regard to all the evidence of this case, I agree with the Respondent that it was very unusual for the Respondent and most tenants as well to have agreed to the literal meaning of the break clause as interpreted by the Applicant. This latter interpretation would put the parties to the same position as if this was a month-to-month term tenancy. However, if the real intention of the parties was that the tenancy was to be leased on a monthly basis, then it would be just as easy for the parties to sign the tenancy on the term that it was on a month to month basis, but not on a 2-year fixed term. Also, I note that in the break clause, the sub-ordinate clause of the sentence that either party could only exercise the break clause after the expiration of a certain period of time was not deleted but only that the space for the filling up of the certain period of time was left blank. In this connection, I also agree with the Respondent that for most 2-year fixed term domestic tenancies in Hong Kong, the landlord and the tenant would agree that the parties could exercise the option after the expiration of the first 12 months of the tenancy. 19.Bearing in mind that the parties were also in agreement that the monthly rent was to be reduced in the first seven months (from May to December 2005) of the 2-year tenancy, I further convince myself that it was most unlikely, on the balance of probabilities, that the parties intended this tenancy to be the same as a tenancy on a month to month term. 20.For the reasons stated above, I decide to agree with the Respondent on the true intention and meaning of the said Break Clause. I therefore allow the review made by the Respondent as a result which I give the following orders: -
The Applicant in person The Respondent in person |