Chong Lap Fu George v. Hydra Shipping Services and Others

DCCJ 1319/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO.1319 OF 2009

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BETWEEN

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Coram: Master B. Mak in Court

Date of Hearing: 12^th March 2010

Date of Handing down of Judgment: 18^th March 2010

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ASSESSMENT OF DAMAGES

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Background

1.This is an assessment of damages of the Plaintiff’s claim against the 1^st, 2^nd and 3^rd Defendants.

2.On 23^rd June 2009, His Honour Judge Thomas Au (as he then was) granted, inter alia, Interlocutory Judgment against the 1^st, 2^nd and 3^rd Defendants for damages to be assessed for breach of the Tenancy Agreement in wrongfully terminating the tenancy on 16^th January 2009.

3.At the hearing on 12^th March 2010, all the three Defendants were absent. I have read the 7^th Affirmation of Lee Yiu Wing filed on 9^th February 2010 regarding service of a sealed copy of an Order made by myself on 4^th January 2010 on each of the Defendants. I am satisfied that due notice of today’s hearing has been given to each of the Defendants. Therefore, the hearing continued in the absence of the Defendants.

The Plaintiff’s case

4.By a Tenancy Agreement dated 2^nd May 2008, the Plaintiff as Landlord leased to the 1^st Defendant as tenant the premises known as Flat A, 3^rd Floor and Car Parking Space No.10 on Basement Floor of Pine Court, No.5 Old Peak Road, Hong Kong (“the said premises”) for a term of 2 years commencing on 16^th May 2008 at the monthly rent of HK$99,000. The said premises has an area of 2,650 square feet. The 2^nd and 3^rd Defendants were guarantors to the said Tenancy Agreement.

5.In breach of the said Tenancy Agreement, the 1^st Defendant surrendered the said premises to the Plaintiff on 16^th January 2009.

6.The Plaintiff said that due to the Financial Tsunami, the market rent of the said premises had dropped rapidly.

7.The Plaintiff owns 4 flats in Pine Court which are let out to various tenants. The tenant of Flat B3 moved out in August 2008. He could only find another tenant at the monthly rent of $63,000 in February 2009.

8.With the experience of Flat B3, the Plaintiff therefore decided to accept an offer of $65,000 per month for the renting out of the said premises to Miss Kelly Shanley Austin for a term of 2 years from 21^st February 2009.

9.The Plaintiff is prepared to give credit to the payment of rental deposit in the sum of $198,000 by the 1^st Defendant.

10.At the request of Miss Austin, the Plaintiff repainted the said premises, cleaned up the doors, windows, kitchen and bathrooms, the costs of which was $22,700 and was paid to Wang Yip Decoration Engineering Company Limited.

11.The Plaintiff paid agency fees to HomeFinders in the sum of $32,500 and legal fees to Messrs. Winston Chu & Co. in the sum of $4,902.50.

12.Madam Chan Wai Yee is a supervisor of Ying Kong Company Limited of which the Plaintiff is the Chairmain. She assisted the Plaintiff on matters including the letting out of properties.

13.She confirmed that the offer of $63,000 per month for Flat B3 was the only offer in 5 months since the tenant moved out in August 2008.

14.Miss Austin was introduced through Madam Nanette Hereward of HomeFinders. Miss Austin could only offer $65,000 per month for the renting of the said premises. After inspecting the said premises, Miss Austin requested the Plaintiff to touch up the paintwork of the said premises as the 1^st Defendant had left the walls with some holes and hooks and the front and back balcony needed some repainting.

15.Madam Nanette Hereward is a registered estate agent and the Managing Director of HomeFinders. She confirmed that she introduced Miss Austin for the renting of the said premises at the monthly rent of $65,000. She said at that time, the economy was looking very gloomy and there was very little activity in the leasing market.

Findings

16.The Financial Tsunami that happened in late 2008 had affected the economy of the world at large. The leasing market especially of high end residential properties (like the said premises) was no exception. I accept that a significant drop in rent for the said premises was unavoidable. In my view, the Plaintiff rented out the said premises at the monthly rent of $65,000 one month after the breach of the 1^st Defendant was a reasonable step to take in the circumstances.

17.As a result, the Plaintiff suffered loss of rental income from 16^th January 2009 to 20^th February 2009 when the said premises was left vacant. The Plaintiff is also entitled to recover from the 1^st Defendant the difference between the old rent of $99,000 and new rent of $65,000 from the commencement of the Tenancy Agreement of Miss Austin until the expiry of the Tenancy Agreement to which the 1^st Defendant was the Tenant.

18.I accept that the expenses incurred by the Plaintiff in renting out the said premises after the breach of the 1^st Defendant are reasonable and should have been within the contemplation of the 1^st Defendant.

19.In my judgment, the loss of the Plaintiff as a result of the breach of the 1^st Defendant are as follows and I so award :-

(a)	Loss of rental from 16/1/2009 to 20/2/2009 when the said premises was left vacant
	$99,000 per month x 12 months x1/365 x 36 days	$117,172.60
(b)	Shortfall of rental income from 21/2/2009 to 15/5/2010
	($99,000 - $65,000) per month x 12 months x 1/365 x 449 days	$501,895.89
(c)	Agency fee paid to HomeFinders	$32,500.00
(d)	Legal fees incurred and paid to Messrs. Winston Chu & Co.	$4,902.50
(e)	Costs incurred on repainting and cleaning up the said premises before renting out	$22,700.00
(LESS)	Rental deposit	$198,000.00
		TOTAL:  $481,170.99

Interest

20.The Plaintiff is entitled to interest on the said sum of $481,170.99 at judgment rate from the date of Writ to the date of Interlocutory Judgment and thereafter at Judgment rate until payment.

Costs

21.The costs of this action was reserved to the Assessment of Damages by the learned Judge on 14^th July 2009. Accordingly, I order that the Defendants shall pay costs of this action to the Plaintiff, to be taxed if not agreed.

22.In respect of the costs of the Assessment of Damages, I have considered the Plaintiff’s Statement of Costs. The Plaintiff’s costs in the Assessment of Damages is assessed by summary assessment in the sum of $24,360, to be paid by the Defendants forthwith.

Mr. Benjamin Chang of Messrs. Winston Chu & Co. for the Plaintiff

1^st, 2^nd and 3^rd Defendants: absent