Lee Wai Kwong and Another v. Vincent Thomas

LDPD 3299/2005

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

LDPD Application No. 3299 of 2005

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Between

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Coram:  Member W. K. LO

Date of hearing:  27 January, 7 February & 28 February 2006

Date of judgment:  21 March 2006

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J U D G M E N T

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Background

1.The Applicants are the landlords and the Respondent the tenant of the premises known as Flat 270 of 6/F, Ming Hing Building, No. 270 Des Voeux Road West, Hong Kong (“the Premises”).  The Applicants have let the Premises to the Respondent since 1 January 2003.  The original written Tenancy Agreement dated 20 December 2002 made between the parties was for a term of 2 years commencing from 1 January 2003 and expiring on 31 December 2004 at a monthly rent of $5,500.  There was a remark in the Tenancy Agreement that “From 1^st January 2003 to 31^st December 2003, neither party can stop the lease.  From 1^st January 2004 to 31^st December 2004, any party can stop this lease by giving one month’s notice in advance to the other party.”

2.According to the Applicants, after the tenancy expired by effluxion of time on 31 December 2004, the Respondent asked them, through the estate agent, to renovate the Premises.  On the other hand, the Applicants decided to take back the Premises.  However, by that time, it was required by law that in order to determine a tenancy which commenced before 9 July 2004, the landlord had to serve to the tenant a Transitional Notice of Termination (“TTN”) giving the tenant a notice of at least 12 months.  Therefore, the Applicants gave evidence that they served a TTN dated 21 April 2005 to the Respondent by registered mail, notifying the Respondent that “the tenancy of the Premises will be terminated on 30 April 2005.”  A copy of the said TTN with record of registered mail was produced as Exhibit A3.

The Applicants’ Application

3.The Applicants filed on 16 November 2005 an application in the Lands Tribunal seeking possession of the Premises on the ground that the Respondent failed to pay rent.  The Applicants sought the following orders: -

(1)   order for vacant possession;

(2)   arrears of part rent/mesne profits for the period from 1 November 2005 to 30 November 2005 in the sum of $2,500

(3)   arrears of rent/mesne profits for the period from 1 December 2005 to the date of delivery of vacant possession of the Premises; and

(4)   costs.

The Respondent’s Notice of Opposition

4.The Respondent filed a notice of opposition on 21 November 2005 stating that he had sent a letter to the Applicants on 10 November 2005 in which he notified them that he was arbitrarily reducing his monthly rent for the Premises to $3,000 per month from $5,500 until the expiry of tenancy contract in April, 2006.   The Respondent added that for more than 6 months, he had been complaining about defects to the Premises that the Applicants had steadfastly refused to repair.  The defects included a long list of defects in appliances, fixtures and fittings and services of water, air-conditioning, electric supply and flush water supply.

Payment of rent/mesne profits in the interim

5.It was not disputed that the Respondent paid the sum of $2,500 to the Applicants’ bank account on the following dates, for his arbitrary partial payments of rents for the period of 4 months from 1 November 2005 to 28 February 2006: 14 November and 3 December 2005, and 4 January and 4 February 2006.  Also, it was recorded that the Respondent paid into the Tribunal on 15 February 2006 a sum of $10,000, being the balance of payments of rents for the above said 4 months’ period assuming a monthly rent of $5,500.  During the adjourned hearing on 28 February 2005, the Respondent submitted that, “I have lodged the $10,000 with the court.  I would ask that the money is kept in the court until the repairs to the premises are effected to the satisfaction of both parties, or that the Court comes to a suitable alternative.”

Evidence from the parties

6.The Applicants denied that the Premises were in a state of disrepair when the Applicants leased out and handed over the Premises to the Respondent before the written tenancy commenced on 1 January 2003.  On the other hand, the Applicants contended that the Respondent had inspected and accepted the “as is” condition of the Premises when the tenancy commenced.  They further said that they did not realize the state of disrepairs until the Applicants had the chance to view the interior of the Premises on a recent occasion.  They accused the Respondent of damaging the Premises. 

7.On the other hand, the Respondent repeated what was stated in his letter attached to the Notice of Opposition.  Therefore, there were opposing evidence and opinion as to the recent state of disrepairs, and who caused the disrepairs.

The main issue of the case

8.However, the main issue lies not with the factual disputes as to whether there were disrepairs in the Premises, who caused the disrepairs, whether the Respondent did complain about the disrepairs and whether the Applicants as the landlord have repaired, to the satisfaction of the Respondent as the tenant. 

9.Rather, the issue is whether the Respondent was entitled to “arbitrarily reducing” the monthly rent passing by $2,500, from $5,500 to $3,000 for the month from 1 November 2005 and onwards.

Findings of the Tribunal

10.I find that as the TTN served by the Applicants is a valid notice made pursuant to the provisions of the 2004 Amendment Ordinance to the Landlord & Tenant (Consolidation) Ordinance, the Premises is currently on a month to month tenancy basis subject to the monthly rent of $5,500 previously agreed under the written tenancy commencing from 1 January 2003.  However, the Applicants as the landlord of the Premises was entitled to seek possession of the Premises if the Respondent failed to pay rent, the full rent of $5,500.  There was no dispute that the Respondent only paid rent to the Applicants’ designated bank account and that the Respondent chose only to pay $3,000 of the $5,500 rent, from 1 November 2005.  

11.I further decide that the Respondent was not entitled to stop paying the monthly rent or to arbitrarily reducing the monthly rent on the ground that the Premises was in a state of disrepairs at a certain point of time of a tenancy, whether it is a fixed term tenancy or on a month to month basis.  I follow the decision of a Court of First Instance, High Court case involving a tenant (plaintiff) and a landlord (defendant), Charmway Development Limited v. Long China Engineering Limited [unreported case, High Court Action, Reference HCA54/2001] in which Justice Chu held that,

“17.   The plaintiff’s obligation to pay rent is set out in clause 2.1 of the Tenancy Agreement.  It is not expressed to be subject to or conditional upon compliance by the defendant of all or part of its obligations thereunder.  The Tenancy Agreement only provided in clause 4.10 for suspension of rent in the even of the Building being destroyed or rendered inaccessible by reason of such events as fire, defective construction or cause or calamity beyond the control of the landlord.  The Tenancy Agreement therefore contemplates the obligation to pay rent to operate independently from the other contractual obligations, including the ones in issue.

18.   Under the common law, the convenant to pay rent has been regarded as independent of the other convenants or obligations under a lease, including, for example, the convenant for quiet enjoyment: Edge v. Boileau and Others [1885] 16 QB 117, see also Taylor v. Webb. [1937] 2 KB 283.  A tenant’s obligation to pay rent is not dependent upon the compliance by the landlord of its obligations under the lease.

19.   There is therefore no room for the defence asserted by the plaintiff to the counterclaim, namely, it is not obliged to pay rent or the defendant is not entitled to rent by reason of the alleged breaches of the Tenancy Agreement on the defendant’s part.

12.In addition, if it was the Respondent’s case that he reduced the rent from $5,500 to $3,000 because he counter-claimed the amount of $2,500 form the rent of $5,500 due, this involves the issue of counter-claim in this case.  However, as the Lands Tribunal is governed by the Lands Tribunal Ordinance (Cap. 17) with the jurisdiction of the Tribunal clearly laid down in section 8 of the Ordinance, there is no jurisdiction of the Tribunal to deal with the counter-claim by the Respondent in this proceedings.

13.Summing up, I find that all the grounds of opposition raised by the Respondent fail.

Orders

14.I make the following orders: -

1.   The Applicants shall after 28 March 2006 (hereinafter called “the Payment Deadline”) recover vacant possession of the Premises from the Respondent;

2.   The Respondent do pay the Applicants arrears of rent/mesne profits from the 1 March 2006 to the date of recovery of vacant possession at the rate of $5,500 per month;

3.   The Respondent do pay the Applicants the costs of this Application which is summarily assessed at $1,000;

4.   If the Respondent should pay to the Tribunal all the arrears of rent/mesne profits stated in paragraph 2 above (including all arrears of rent/mense profits due on or before the Payment Deadline, the Respondent shall continue to hold the Premises according to the original tenancy without any new tenancy, the order for recovery of vacant possession of the Premises in paragraph 1 above will also cease to have effect.

(This Tribunal may extend the Payment Deadline under section 21F of the High Court Ordinance, Cap. 4.)

(In default of the Respondent paying into the Tribunal the sums in paragraph 2 and 3 in accordance with paragraph 4 on or before the Payment Deadline (or such date as may be extended by the Tribunal), the orders in paragraphs 1 to 3 above may be enforced, and so long as this order remains unreversed, the Respondent shall be barred by the said section 21F from all relief;

5.   Payment out of the sum to the Applicant after payment of the same into the Tribunal by the Respondent;

(Payments pursuant to this order should be made in cash, by cashier orders issued by banks in Hong Kong or by cheques drawn by firms of solicitors in Hong Kong.  This Tribunal does not accept any other mode of payment pursuant to this order.)

6.   The Tribunal shall pay out to the Applicants the sum of $10,000 paid in by the Respondent on 15 February 2006, being partial payments of rent/mesne profits for the Premises for the period from 1 November 2006 to 28 February 2006.

The Applicants, in person

The Respondent, in person