Mersey Manufactures Ltd v. Tak Hung (Holding) Co Ltd

IN THE LANDS TRIBUNAL OF HONG KONG

LANDS TRIBUNAL APPLICATION NO. LT 558/94

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BETWEEN

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TRIBUNAL :  Member M.W. Philips (Esq.)

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DECISION

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1. This is an application for a new tenancy under Section 117(1) of Part IV of the Landlord and Tenant (Consolidation) Ordinance, Cap.7. The applicant is the tenant and the respondent is the landlord of Flat 24A, 11^th Floor, Po Shan Mansions, 14-16 Po Shan Road, Hong Kong. The tenancy includes a car parking space.

2. Neither party lodged a valuation report under Rule 18 of the Lands Tribunal Rules, Cap.17.

3. Mrs. Suzanne Miller, who is the wife of the Director of Mersey Manufactures Ltd. and an occupant of the subject premises represented the applicant, and Mr. Wu Ka Kay, Assistant General Manager of Tak Hung (Holding) Co. Ltd., represented the respondent.  No expert evidence was called by either party.

4. The tenancy was terminated on 5^th April 1994, by the serving of a form CR101 dated 28^th September 1993.  The relevant date for the determination of the Prevailing Market Rent which is the only matter in dispute, in therefore the 5^th April 1994.

5. Mrs. Miller offered no evidence but said that the rent should be no more than $65,000 exclusive of rates and maintenance charges.

6. Mr. Wu gave evidence.  In support of his figure of $70,000, he produced a tenancy agreement dated 26^th May 1994 for Flat 32A, 15^th Floor in the same building.  This agreement, which was his only evidence, was for a rent of $80,000 per month exclusive for two years from 1^st May 1994. Under cross-examination he produced details of work done to the subject flat in early 1992 before the present tenant moved in.   The total cost spent on the flat was about $550,000.

7. Due to the lack of evidence the tribunal read out to both parties a list of comparable lettings available from the Commissioner of Rating and Valuation.  The Tribunal then asked Mr. Wu if he had any comments.  The list is attached to this Decision.  It was obtained by the tribunal on 28^th May 1994 when it was noted that no reports had be filed.  The information available from the Commissioner was admitted under Section 10(6), Lands Tribunal Ordinance, Cap. 17.

8. Mr. Wu conceded that the $80,000 per month for Flat 32A which had air-conditioning included, was out of line with the others in the list.

9. After considering the list, Mr. Wu said that the rent should be, “$60,000 something, say about $65,000 on that information”.  He said he based his opinion on the rent of $63,000 per month obtained for 14 Po Shan Road 1^st Floor for a two year lease from February 1994.  This flat is the same size as the subject flat but appears to have had some additions installed.  Mr. Wu said he expected it had been renovated.  In any case Mr. Wu, finally submitted that the rent should $65,000.

10. When Mrs. Miller in final submission came to comment she said that she thought the more recent rent of $58,000 per month for an identical 11^th Floor flat next door to her at 10 Po Shan Road was more appropriate.  It let for two years from March 1994.  It is the same design and size as the subject flat but No. 10 as a pool and a play ground.  She said that after being made aware of the agreed rents in the list, the new rent should be $58,000.

11. After considering the whole of the evidence, I determined the Prevailing Market Rent as the 5^th April 1994 at $60,000 exclusive of rates and management fees.  I make the following order :

12. A new tenancy shall be granted for two years from 6^th April 1994 at a rent of $60,000 per month exclusive of rates and maintenance charges.

13. The new tenancy shall otherwise be on the same terms and conditions as the previous tenancy save for the deposit clause which shall be altered to reflect the new rent.

14. No order as to costs.

DATED this 30^th day of May 1994.

Schedule Comparable Rents

65

yes

223.9

44450
(Incl. Parking $1450)

63000

Excl.

2 yrs.

2/94

R1A

Fresh

14 Po Shan Road 12/F

12^th

65

yes

223.9

44450
(Incl. Parking $1450)

49000

Excl.

2 yrs.

10/93

CR109

Renewal

14 Po Shan Road 11/F

11^th

65

yes

223.9

44450(Incl. Parking $1450)

58000

Excl.

2 yrs.

3/94

CR109

Fresh

14 Po Shan Road 9/F

65

yes

223.9

44450(Incl. Parking $1450)

56380

Excl.

2 yrs.

1/94

CR109

Fresh

14 Po Shan Road 9/F

65

yes

223.9

44450
(Incl. Parking $1450)

50000

Excl.

2 yrs.

12/93

R1A

Renewal

14 Po Shan Road 10/F

2nd

65

yes

223.9

44450(Incl. Parking $1450)

54000

Excl.

2 yrs.

12/93

CR109

Renewal