Brilliant Harbour Development Ltd v. Stuart Andrew Rattigan
Read the full judgment text of DCCJ 2074/2004 on BabelCite. This District Court judgment.
1. The Plaintiff is the registered owner of the premises known as House No.17 Seabee Lane, Headland Village, No.17 Seabee Lane, Discovery Bay City, Lantau Island, New Territories (hereinafter called “the Plaintiff’s Premises”).
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DCCJ 2074 /2004 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 2074 OF 2004 -------------------- BETWEEN
-------------------- Coram: Deputy District Judge J. Ko in Court Date of Hearing: 29th, 30th September 2005 & 21st October 2005 Date of Handing Down Judgment: 9thJanuary 2006 ______________________ J U D G M E N T ______________________ 1.The Plaintiff is the registered owner of the premises known as House No.17 Seabee Lane, Headland Village, No.17 Seabee Lane, Discovery Bay City, Lantau Island, New Territories (hereinafter called “the Plaintiff’s Premises”). 2.By a provisional tenancy agreement dated 28th February 2001 made between the Plaintiff as landlord and the Defendant as tenant (hereinafter called “the Provisional Tenancy Agreement”), the Plaintiff agreed to let and the Defendant agreed to take on lease the Plaintiff’s Premises for a term of 24 calendar months from 14th April 2001 to 13th April 2003 at the rent of $74,000 per calendar month inclusive of rates, government rent and management fee payable on the 1st day of each month. In furtherance of the Provisional Tenancy Agreement, the Plaintiff and the Defendant entered into a tenancy agreement on 8th March 2001 (hereinafter called “the Formal Tenancy Agreement”). 3.It is common ground that the Defendant has failed to pay rent to the Plaintiff since 1st September 2002. 4.It is the Plaintiff’s pleaded case that the Defendant has repudiated the Formal Tenancy Agreement by reason of non-payment of rent and the Plaintiff has accepted the repudiation and terminated the said tenancy. By this action, the Plaintiff is claiming against the Defendant for vacant possession of the Plaintiff’s Premises, arrears of rent, mesne profits and other loss and damage. 5.According to the Defendant, Mr. Yau Man Yin of the Plaintiff (hereinafter called “Mr. Yau”) had represented to him prior to the making of the Provisional Tenancy Agreement and in order to induce him to take up the tenancy that:
and these representations constitute a collateral agreement between the parties (hereinafter called “the Collateral Agreement”) which is distinct from the Provisional Tenancy Agreement and the Formal Tenancy Agreement subsequently made by the parties. 6.It is then the Defendant’s pleaded case that:
7.In the premises, says the Defendant, the Plaintiff was in breach of the Collateral Agreement, the Provisional Tenancy Agreement and the express terms and implied covenants of the Formal Tenancy Agreement. The Defendant is counterclaiming in this action for rescission of the Formal Tenancy Agreement, reimbursement of the commission paid to estate agent and the rental deposit paid to the Plaintiff as well as loss and damage. 8.This action was initially commenced in the Court of First Instance and was subsequently transferred to this court. The main dispute 9.There is no dispute that the Defendant has vacated the Plaintiff’s Premises on 28th October 2002. 10.The Plaintiff’s counsel has observed in his opening submission that since there is no dispute that the Defendant has moved out of the Plaintiff’s Premises before the expiry of the term of the tenancy under the Formal Tenancy Agreement, the burden is on the Defendant to prove that the Plaintiff breached or repudiated the tenancy. 11.The main dispute in this case is therefore on the Defendant’s complaintsconcerning the swimming pool, the electricity supply system and the water quality at the Plaintiff’s Premises. The swimming pool 12.According to the Defendant’s pleaded case, the swimming pool did not function properly and was not fit for swimming due to lack of repair and maintenance and failure to replace and install a new pump and filter. 13.Clause 15 of the Provisional Tenancy Agreement expressly provided that the Defendant’s tenancy was conditional upon the Plaintiff carrying out the works listed therein prior to the commencement of the tenancy. The clause has been incorporated into the Formal Tenancy Agreement. One of the works listed in that clause was to completely drain and scrubbed clean the swimming pool. According to the Defendant’s testimony, the Plaintiff did not drain and scrubbed clean the swimming pool prior to the commencement of the tenancy. Furthermore, due to poor maintenance and malfunction of the filter system installed, newly pumped-in water became stagnant soon and the swimming pool did not function properly. It is said that the situation had become simply unacceptable. 14.The Defendant’s witness, Mr. Stradmoor, gives similar evidence. In particular, he testifies that he had visited the Plaintiff’s Premises during the first month of the Defendant’s tenancy and noticed the swimming pool to be very disgusting and really unsuitable for human use. 15.There is also the evidence of Mr. Weiss in this regard, in terms of his written statement. Mr. Weiss was the Defendant’s neighbour who occupied House No.19 between February 2001 and December 2003. Mr. Weiss is no longer residing in Hong Kong by the time of trial but the parties have agreed that his written statement be admitted as hearsay evidence subject to the question of weight to be given. According to Mr. Weiss, the swimming pool at the Plaintiff’s Premises was not only unstable but unsightly and unhealthy. The mosquito problem created by the stagnant water of the swimming pool at the Plaintiff’s Premises frequently made it uncomfortable for Mr. Weiss to use his own swimming pool. He opines that the filter and water pump of the swimming pool at the Plaintiff’s Premises were not working correctly and were very old. 16.According to the Plaintiff’s witness, Mr. Yau, the Plaintiff had engaged the service of Paradise Pools Limited (hereinafter called “Paradise Pools”) to clean and maintain the swimming pool once a week prior to the commencement of the Defendant’s tenancy. He did ask Paradise Pools to clean and service the swimming pool prior to the commencement of the Defendant’s tenancy in accordance with clause 15 of the Provisional Tenancy Agreement. After the commencement of the tenancy, it became the responsibility of the Defendant (as tenant) to maintain the pool and the Defendant did continue to engage the service of Paradise Pools for that purpose until sometime in July 2002 when the Defendant terminated its service. 17.Mr. Yau also found the swimming pool to be in a sorry state when he recovered possession of the Plaintiff’s Premises. He has adduced photographs in evidence (at p.74 of Agreed Bundle D) to show the state of the swimming pool when he recovered possession of the Plaintiff’s Premises. He attributes the sorry state to the fact that the Defendant had not engaged anyone to maintain the swimming pool since July 2002. 18.The Defendant denies having engaged Paradise Pools to maintain the pool regularly. He contends that the Plaintiff, as landlord, had the responsibility to maintain the pool and he had only asked Paradise Pools to work on the pool as and when required and upon prior confirmation by the Plaintiff that the Plaintiff would pay for such work. He relies on the fact that the Plaintiff has paid for work done by Paradise Pools during his occupancy. 19.First, it is the Defendant’s case that the swimming pool was in a sorry state right from the very beginning when the Defendant’s tenancy commenced. I find this aspect of the Defendant’s case very suspicious. 20.Clause 15 of the Provisional Tenancy Agreement expressly provided that the Defendant’s tenancy was conditional upon the Plaintiff carrying out the works listed therein prior to the commencement of the tenancy. The Defendant explains that he had to move into the Plaintiff’s Premises notwithstanding the Plaintiff’s failure to comply with clause 15 as his tenancy with his previous landlord had already expired. After he had moved into the Plaintiff’s Premises, he drained and scrubbed clean the pool himself but the malfunctioning of the filter system had caused the newly pumped-in water to become stagnant soon. 21.According to the Defendant, his mother suffered illness after she had used the swimming pool and one of the items of the Defendant’s counterclaim herein is $500 medical expenses. I find it strange that the Defendant would allow his mother to use the swimming pool if the pool was in the conditionallegedby him notwithstanding his effort in cleaning and scrubbing it. 22.On the other hand, the fact that the Plaintiff has complied with clause 15 is confirmed by the written statement of Mr. Ling Tin-lai of Paradise Pools (at p.13 of Agreed Bundle D). Mr. Ling is not called as a witness but the parties have agreed that his written statement be admitted as hearsay evidence subject to the question of weight to be given. According to this statement, a full inspection, cleaning and sterilization were carried out in April 2001, that is before the commencement of the Defendant’s tenancy. 23.Having regard to all the circumstances of this case including the matters listed in section 49 of the Evidence Ordinance, I have decided to give full weight to Mr. Ling’s written statement. The Defendant has not challenged the Plaintiff to call Mr. Ling but instead agrees to the production of the written statement in evidence. The Defendant has not submitted on why full weight should not be given to the content of the statement. Given the fact that the Defendant had also had contacts with Paradise Pools before, it would not be difficult for him to either call Mr. Ling to challenge the statement or to submit why full weight should not be given. It is not the Defendant’s case that Mr. Ling had any motive to conceal or misrepresent matters. 24.In the premises, I find it unlikely that the swimming pool was in the sorry state alleged by the Defendant at the commencement of his tenancy. 25.Secondly, it is the Defendant’s case that it was the duty of the Plaintiff to maintain the swimming pool during the term of the tenancy. The Defendant relies on the fact that the Plaintiff has paid for the work done by Paradise Pools during his occupancy of the Plaintiff’s Premises. 26.Mr. Yau explains that the Defendant would call Paradise Pools to work on the pool whenever there was any problem without notifying him or anyone of the Plaintiff and then requested the Plaintiff to reimburse him. The Plaintiff did reimburse the Defendant as a gesture of goodwill and on a discretionary basis. 27.The generosity of the Plaintiff is confirmed by the fact that the plaintiff has reimbursed the Defendant for not just the work of Paradise Pools on the pool but other miscellaneous items. According to the statement at p.21 of Agreed Bundle D, the Plaintiff was requested to reimburse the Defendant $4,000 for replacing of message water tap, $5,100 for maintenance and repair of the swimming pool and $342.50 for liquefied petroleum gas, totaling $9,442.50. The Plaintiff paid the said sum of $9,442.50 by way of a cheque drawn to the Defendant (at p.23 of Agreed Bundle D). The Defendant does not dispute such payments. There is nothing in the Provisional Tenancy Agreement or the Formal Tenancy Agreement obliging the Plaintiff to pay for message water tap or liquefied petroleum gas. 28.In fact, neither the Provisional Tenancy Agreement nor the Formal Tenancy Agreement provided that the Plaintiff as landlord should maintain the swimming pool. On the contrary, clause 10 of the Formal Tenancy Agreement provided that the Defendant as tenant should yield up the Plaintiff’s Premises and all fittings and fixtures therein to the Plaintiff in tenanable repair and condition (fair, wear and tear excepted) at the expiration or sooner determination of the tenancy. Indeed, the Defendant has also admitted under cross-examination that he should be responsible for the maintenance of the pool although he put up the excuse that he was unable to do so because of the Plaintiff’s failure to comply with clause 15 of the Provisional Tenancy Agreement in the first place. What is to be noted is that there is nothing to oblige the Plaintiff to maintain the pool during the Defendant’s tenancy and this is consistent with the Plaintiff’s case that it had only paid for Paradise Pools’ work on the pool as a gesture of goodwill and on a discretionary basis. 29.Thirdly, it is common ground that the swimming pool was in a sorry state when the Plaintiff recovered possession of the Plaintiff’s Premises. The Plaintiff has adduced photographs (at p.74 of Agreed Bundle D) to show how it looked like. Mr. Ling’s written statement also confirms that when the Plaintiff reengaged Paradise Pools to service the pool in November 2002, the swimming pool was found to be covered with moss with lots of inserts and the boundary of the pool was full of weed. Question remains as to how the condition of the pool had deteriorated to such a sorry state. 30.Whether the Defendant’s pleaded case is based on breach of the Collateral Agreement and/or the Provisional Tenancy Agreement and/or the Formal Tenancy Agreement, it is crucial for him to establish the cause of the sorry state of the swimming pool. The Defendant and his witnesses all blame it on poor maintenance and inadequacy of the pump and filter at the pool. However, both the Defendant and Mr. Stradmoor confirm under cross-examination that they have no expertise in repair and maintenance of swimming pools. It is not apparent from Mr. Weiss’s statement that he has such expertise either. As such, the Defendant’s evidence concerning the cause of deterioration of the condition of the swimming pool must be viewed with caution. 31.It is the Defendant’s case that he had not engaged anyone to regularly maintain the pool during his occupancy but had only called upon Paradise Pools to work on the pool as and when required. I find this aspect of the Defendant’s case most surprising. 32.It is only common sense that the condition of any swimming pool would deteriorate if it is not regularly maintained. It is quite unbelievable that the Defendant would endure the sorry state of the pool during his occupancy from April 2001 to October 2002 without engaging someone to maintain it regularly. This is all the more so as it was apparently the Defendant’s belief that the Plaintiff should be responsible for the maintenance of the pool and the Plaintiff had always pay for work done on the pool. If the Defendant was diligent enough to request Paradise Pools to work on the pool whenever necessary and then asked the Plaintiff to pay for such work, why did he not do the same in terms of regular maintenance? 33.On the other hand, Mr. Ling confirms in his written statement that the Defendant had in fact engaged the service of Paradise Pools during the period from May 2001 to June 2002 to maintain the pool and the pool was operating normally and with the Defendant’s satisfaction during that period. However, the Defendant terminated the service of Paradise Pools in July 2002. When the Plaintiff reengaged the service of Paradise Pools in November 2002, the swimming pool was found to be covered with moss with lots of inserts and the boundary of the pool was full of weed but the filter system of the pool was found to be operating normally. 34.Mr. Ling’s statement is supported by the fact that Paradise Pools sent invoices directly to Mr. Yau of the Plaintiff before the commencement of the Defendant’s tenancy (see invoice dated 12th October 2000 at p.15 of Agreed Bundle D) but invoices were apparently issued to the Defendant (see invoice dated 23rd May 2001 at p.17 of Agreed Bundle D) after the commencement of the Defendant’s tenancy. 35.Indeed this aspect of the Plaintiff’s case is also confirmed by an undated statement from Ms. Karen Lam of Smart-Land Property Consultants (at p.19 of Agreed Bundle D) who had acted as estate agent for both the Plaintiff and the Defendant in concluding the subject tenancy. Ms. Lam confirms in her statement that the Plaintiff had requested her to notify the Defendant about complaints made by the management office concerning the swimming pool after the Defendant had terminated the maintenance service of the service provider during the Defendant’s tenancy. 36.Ms. Lam happens to be also an intended witness of the Defendant and has made a further written statement for the Defendant (at p.53 of Agreed Bundle D). Eventually, Ms. Lam is not called to testify at trial and the parties have agreed that her two written statements be admissible as evidence subject to the question of weight. Having regard to all the circumstances including those listed in section 49 of the Evidence Ordinance, I have decided to give full weight to both statements of Ms. Lam. There is simply no basis in the circumstance of this case to differentiate between the two statements of Ms. Lam in terms of weight to be given. 37.In the premises, I find it more likely that the sorry state of the pool found in November 2002 was not due to inadequacy of the pump or filter but poor maintenance, due to the Defendant terminating the service of Paradise Pools in July 2002 and not maintaining the pool thereafter. The electricity supply system 38.It is the Defendant’s pleaded case that the electricity supply system at the Plaintiff’s Premises malfunctioned, which led to leakage and overload of electricity and/or instability of electricity supply which resulted in short circuits and damage to electrical appliance. 39.Both the Defendant and Mr. Stadmoor testify that malfunctioning of electricity supply system at the Plaintiff’s Premises had caused 14 short circuits during the Defendant’s occupancy and $3,500 worth of frozen meat was laid waste as a result. 40.Notwithstanding the above allegations, the Defendant has not adduced expert evidence at trial to confirm the malfunctioning of the electricity supply system and its cause. Neither the Defendant nor Mr. Stradmoor has the expertise to say what had caused those short circuits during the Defendant’s occupancy of the Plaintiff’s Premises. 41.It is common ground that the Plaintiff did send an electrician from Interior 18 to check the electricity supply system at the Plaintiff’s Premises after he had received complaints from the Defendant. According to Mr. Yau, the electrician has confirmed that there was no problem with the electricity supply system there. 42.In the premises, I find that the Defendant has failed to prove that there was anything wrong with the electricity supply system at the Plaintiff’s Premises. The water supply 43.It is the Defendant’s pleaded case that the quality of water at the Plaintiff’s Premises was poor and unfit for human use. The poor water quality is said to be due to lack of repair or maintenance of the internal water pipes installed at the Plaintiff’s Premises. 44.The Defendant describes at trial that the water quality was so disgusting that it was unsuitable even for bathing let alone human consumption. He has, however, adduced no expert evidence in this regard and is apparently contended only to rely on a letter dated 27th May 2002 from the Office of the Water Authority (at p.29 of Agreed Bundle D) which states that some sections of the water pipes at the Plaintiff’s Premises have corroded and need to be replaced. 45.To start with, the relevant part of the said letter from Office of the Water Authority states that:
46.I accept the Plaintiff’s counsel’s submission that the said letter only suggests one of the ways to improve the water quality at the Plaintiff’s Premises. This much is admitted by the Defendant under cross-examination. 47.In fact, the Defendant has also admitted under cross-examination that the Plaintiff did change the water tank for him and has further offered to provide him water filter. 48.Although the Plaintiff may have agreed under clause 12(a) of the Formal Tenancy Agreement to maintain and keep, inter alia, the pipes in proper and tenantable repair and condition, the clause further provides that:
49.In a letter dated 10th July 2002 from the Plaintiff to the Defendant’s employer (at pp.69-71 of Agreed Bundle C), the Plaintiff has offered to change the pipes at the Plaintiff’s Premises. There is no dispute that the Defendant has received the said letter through his employer (see p.73 of Agreed Bundle C). The Defendant has subsequently written to the Plaintiff proposing to engage his own contractor for, inter alia, chaning the pipes and to deduct the costs and expenses from the rent payable to the Plaintiff (see pp.35-38 at Agreed Bundle D). Be that as it may, the Defendant has neither waited for the Plaintiff to change the pipes nor proceeded with the work himself. Instead, the Defendant simply vacated the Plaintiff’s Premises. 50.By offering to change the pipes at he Plaintiff’s Premises, the Plaintiff was apparently acting in accordance with clause 12(a) of the Formal Tenancy Agreement. As such, it cannot be said that the Plaintiff was in breach of clause 12(a). The Defendant has also failed to establish any implied covenant that the Plaintiff’s Premises would be fit for human habitation. In any event, I cannot see how the Plaintiff can be said to have breached any of the implied covenants alleged by the Defendant by reason of poor water quality at the Plaintiff’s Premises. A cynical view of the Defendant’s case 51.In fact, I take a more cynical view of the Defendant’s case having regard to all the circumstances of this case. 52.The Defendant is currently residing at a premises in Siena One, Discovery Bay on Lantau Island (hereinafter called “the Defendant’s Premises”). The Defendant purchased the Defendant’s Premises in about March 2002 by means of a mortgage and completiontook place in September 2002. 53.The Defendant admits under cross-examination that his employer in the past has paidhim allowance for renting the Plaintiff’s Premises. Given the purchase of the Defendant’s Premises, he is either entitled to an allowance for renting the Plaintiff’s Premises or an allowance for the mortgage on the Defendant’s Premises but not both. 54.It is the Defendant’s testimony that he had initially intended the purchase of the Defendant’s Premises to be an investment. He had instructed estate agents to find prospective tenants for him (see pp.67-73 of Agreed Bundle D). 55.In his witness statement, the Defendant alleges that he would have let out the Defendant’s Premises but for the breaches on the part of the Plaintiff (see paragraph 22 of the Defendant’s witness statement at p.36 of Agreed Bundle B). However, he admits under cross-examination that in fact he was unable to find a tenant for the Defendant’s Premises. 56.In my view, the timing of:
tend to cast a shroud of suspicion on the Defendant’s case. The fact that the Defendant continued to occupy the Plaintiff’s Premises until the end of October after he had already stopped paying rent to the Plaintiff since 1st September 2002 seems to be referable to the 2 months rental deposit held by the Plaintiff. 57.The Defendant has painted a very bleak picture of his occupation of the Plaintiff’s Premises. The condition of the swimming pool was disgusting and unsuitable for swimming. There were frequent short circuits due to malfunctioning of the electricity supply system. The water was not suitable even for bathing let alone human consumption. And at least the sorry state of the swimming pool had existed right from the very beginning of the tenancy. Yet, the Defendant continued to occupy the Plaintiff’s Premises until 28th October 2002, i,e. for some 18 months or 3 quarters of the subject tenancy. 58.The Defendant was apparently relying on clause 12(a) of the Formal Tenancy Agreement in proposing to rectify the pipes himself and then claim the cost back from the Plaintiff. Yet, the quotation obtained by the Defendant came up to $228,150 and included items such as:
59.The Plaintiff’s counsel has observedthat the real intention of the Defendant is betrayed by the letter dated 10th September 2002 (at p.35 of Agreed Bundle D) in which the Defendant stated:
60.This letter was followed by a letter from the Defendant’s solicitors dated 23rd September 2002 stating that the Defendant would instruct his own contractor to do the work and deduct the cost and expenses from the rental payable to the Plaintiff. Notwithstanding these threats, the Defendant did not commence any work at the Plaintiff’s Premises but instead vacated the premises on 28th October 2002. 61.In my view, the above circumstances tend to cast doubt on the genuineness of the Defendant’s complaints and his counterclaim. 62.Given my above findingson the Defendant’s complaints concerning the swimming pool, the electricity supply system and the water supply at the Plaintiff’s Premises, the Defendant’s counterclaim is bound to fail. Even if I am wrong in doubting the Defendant’s complaints, I would not have allowed the Defendant’s counterclaim. 63.I would not have found for the existence of the Collateral Agreement. The parties have taken care to reduce their consciences concerning rectification of certain defects at the Plaintiff’s Premises before commencement of the tenancy in writing in terms of clause 15 of the Provisional Tenancy Agreement. I find it strange in those circumstances that there is yet some other agreement made between the parties which has not been covered by clause 15. 64.There is simply no basis for the Defendant to claim for reimbursement of the $18,500 commission paid to his estate agent. The estate agentdid assist the parties in concluding the Provisional Tenancy Agreement and the Formal Tenancy Agreement and, in pursuance thereof, the Defendant has occupied the Plaintiff’s Premises for some 18 months! 65.The $3,500 claim for loss of food stored in refrigerator is not supported by receipt. The Defendant has notprovided particulars of such loss in evidence. 66.The Defendant has provided no particulars on his claim of $3,000-$4,000 on distilled water. The claim is also not supported by receipt. In any event, the claim is not consistent with the statement in the letter from the Office of Water Authority dated 27th May 2002 that the water can become clear most of the time after the water taps have been turned on for a while. There is no expert evidence to confirm that the water at the Plaintiff’s Premises was really unsuitable for human consumption. 67.The Defendant has also not produced receipt for his claim of $500 for his mother’s medical expenses. No medical evidence has been adduced to confirm what the illness was and whethersuch illness related to the use of the swimming pool. 68.I am not impressed with the evidence of Mr. Stradmoor that the difference between a house with a swimming pool (such as the Plaintiff’s Premises) and a house without one is $15,000 a month. Although he might have been acting as a freelance agent for Smart-Land Property Consultants for 4 years, his role thereat seemed to be confined to taking prospective customers to view premises and acting as an interpreter for Ms. Lam. I do not accept that Mr. Stradmoor has the requisite expertise to make the assessment. No particulars, such as comparables for the relevant period, have been provided to support by Mr. Stradmoor’s assessment. 69.The Defendant is also claiming for $100,000 as general damages for inconvenience and discomfort. There is no evidential basis for such a claim and the amount claimed appears to be arbitrary. Quantum of the Plaintiff’s claim 70.I shall now turn to the quantum of the Plaintiff’s claim. 71.Given my above findings, the Plaintiff was not in breach of any agreement. Rather, by vacating the Plaintiff’s Premises during the term of the tenancy without any agreement on the part of the Plaintiff for early termination, the Defendant has repudiated the Formal Tenancy Agreement. 72.The ordinary contractual principles of repudiation and acceptance of repudiation applies to a tenancy agreement (see Highway Properties Ltd v. Kelly, Douglas & Co Ltd (1971) 17 DLR (3d) 710 and Hop Woo Cheung Enterprises Ltd v. Intergroup Industries Ltd [1982] HKC 436). Acceptance of repudiation by the innocent party is sufficient when there is an unequivocal act which is inconsistent with the subsistence of the contract (see Chitty on Contracts, 29th edition (2004), Vol.1, para.24-013). 73.It is common ground that after the Defendant has moved out, the Plaintiff engaged contractors to do work at the Plaintiff’s Premises. The Plaintiff also instructed estate agent to let out the premises (see pp.39 and 41 of Agreed Bundle D). By engaging estate agent to let out the Plaintiff Premises, the Plaintiff has accepted the Defendant’s repudiation. According to the evidence, the earliest date upon which the Plaintiff engaged estate agent to let out the premises was 6th November 2002 (see the key receipt at p.41 of Agreed Bundle D). Under common law, the Plaintiff’s acceptance of the Defendant’s repudiation gave rise to a right to claim damages. 74.It is Mr. Yau’s evidence that notwithstanding the efforts of both the Plaintiff and the Plaintiff’s estate agents, a tenant was only found in August 2003, that is after the expiry of the tenancy under the Formal Tenancy Agreement. This is apparently supported by the Defendant’s evidence that he had also not been able to let out the Defendant’s Premises. In the premises, I accept that the Plaintiff has discharged its duty to mitigate damages. I am satisfied that the Plaintiff is entitled to arrears of rent from 1st September 2002 to 6th November 2002 at $74,000 per month and thereafter damages at $74,000 per month until the expiry of the tenancy on 15th April 2003. 75.The Plaintiff’s claim for charges for cleaning and repairing of the swimming pool and for clearing rubbish and old furniture left by the Defendant is supported by photographs (at pp.43-45 of Agreed Bundle D), invoice (at p.42 of Agreed Bundle D) and cheque (at p.46 of Agreed Bundle D). I therefore accept the Plaintiff’s claim for these charges. 76.The Plaintiff is therefore entitled to the following sums:
77.Under clause 3 of the Formal Tenancy Agreement, the Plaintiff is entitled to charge interest at 3% over the best lending rate from time to time of the Hongkong and Shanghai Banking Corporation in respect of any payments to be made to the Plaintiff under the Formal Tenancy Agreement as shall be more than 14 days in arrears and such interest shall be payable from the date upon which such payment in arrears fell due. However, there is no proof of the applicable best lending rate(s)(see Hong Kong Civil Procedure 2004, para.6/L/28). In the premises, I am only minded to grant prejudgment interest on unpaid rental from the date upon which it fell due at judgment rate. 78.The Plaintiff is agreeable to deduct the $148,000 rental deposit from its claim. Conclusion 79.For the above reasons, I grant judgment in favour of the Plaintiff against the Defendant. 80.The Defendant shall pay the Plaintiff:
81.The Defendant shall further pay the Plaintiff damages in the sum of $248,267 (i.e. $387,267 + $5,000 + $4,000 – $148,000) together with interest thereon at judgment rate from the date of judgment until payment. 82.The Defendant’s counterclaim is dismissed 83.There is no reason why costs should not follow the event in this action. The Plaintiff has asked for indemnity costs based on clause 3 of the Formal Tenancy Agreement. Costs is always in the discretion of the court and there is no special or unusual feature in this case justifying an order for costs on indemnity basis. I therefore make a costs order nisi that the costs of this action, including the costs of the counterclaim and all reserved costs, be to the Plaintiff to be taxed if not agreed. Unless an application has been made to vary such order, such order shall become absolute 14 days after this written decision is handed down.
Mr. Vincent Lam Chung Wai instructed by Messrs. Chan & Co. for Plaintiff. Mr. Ian Packwood instructed by Messrs. Cheung, Fung & Hui for Defendant. |
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