Ting Chun Yim v. Logi Enterprises Co Ltd
Read the full judgment text of HCMP 737/2011 on BabelCite. This High Court CFI judgment was delivered on 12 December 2011.
1. The Respondent is the former landlord of Flat A, 6/F, King Hing Building, 52-54 Argyle Street, Kowloon. It sub-divided the premises into 5 small units, one of which is called Room A2 (“the suit premises”).
Cites 1 case
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[English Translation - 英譯本] IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL MISCELLANEOUS PROCEEDINGS NO. 737 OF 2011 (ON AN INTENDED APPEAL FROM LDPD NO. 218 OF 2011) _______________________
Coram: Hon Yuen JA and Chu JA in Court Date of Hearing: 15 November 2011 Date of Judgment: 12 December 2011 ________________________ JUDGMENT ________________________ Hon Chu JA (giving the judgment of the Court): Factual background 1.The Respondent is the former landlord of Flat A, 6/F, King Hing Building, 52-54 Argyle Street, Kowloon. It sub-divided the premises into 5 small units, one of which is called Room A2 (“the suit premises”). 2.On 25 September 2005 the Respondent (represented by director Lam Ming Chung) signed a tenancy agreement with the Applicant to let the suit premises to her for the period from 25 September 2005 to 24 September 2009. 3.On 24 March 2010 the Respondent (represented by director Lam Ming Chung) signed another tenancy agreement with the Applicant to let the suit premises to her for the period from 24 March 2010 to 23 March 2014 at a monthly rent of $2,600, plus $200 a month for water and electricity charges. 4.On 24 December 2010 the Respondent (represented by director Lam Chin Wang (transliteration)(林展弘)) and the Applicant reached an agreement on surrender and executed a written agreement to that effect (“surrender agreement”). Pursuant to the surrender agreement:
LDPD No. 218 of 2011 5.On 25 January 2011 the Respondent made an application in the Lands Tribunal for repossession of the suit premises and an order that the Applicant pay mesne profits up to the day of delivery of vacant possession of the suit premises. In the Notice of Application (Form 22), the Respondent set out the basis of its application, as follows: “As the tenant and the landlord entered into a surrender agreement on 24 December 2010, which stipulated that possession of the rented premises was to be delivered back to the landlord on or before 23 January 2011, but contact could not be made with the tenant on 24 January, the court is requested to make an order for the landlord to repossess the rented premises.” 6.As the Applicant did not file any Notice of Opposition, the Lands Tribunal entered judgment in favour of the Respondent on 28 February 2011. Pursuant to the judgment:
7.On 4 March 2011 the Applicant applied to the Lands Tribunal to set aside the judgment. In her supporting affirmation, she stated that she had not received the process of court as she was not in Hong Kong. She also mentioned that she contacted Mr. Lam Ming Chung on 23 January but he did not turn up. The Applicant indicated that she had already paid rent for two months. 8.On 17 March 2011 Deputy Judge Simon Lui of the Lands Tribunal dismissed the Applicant’s application after hearing and made no order as to costs. 9.On 22 March 2011 the Applicant applied to the Lands Tribunal for review of the judgment of 17 March. In her supporting affirmation, she mentioned that she telephoned Mr. Lam Chin Wang, the representative of the Respondent, on 23 January, but Mr. Lam did not repossess the suit premises; and that she had not received the process of court as she had left Hong Kong for her native place. She also indicated that there were no arrears of rent and she had not received the compensation which the Respondent had, by the surrender agreement, undertaken to pay. She claimed that it was the Respondent who did not perform the agreement and, on that basis, asked to continue to reside at the suit premises. 10.On 8 April 2011 Deputy Judge Simon Lui dismissed the Applicant’s application for review. 11.On the other hand, the Respondent was issued a writ of possession by the Lands Tribunal, and court bailiff posted a “Notice to Quit to Occupant” at the entrance of the suit premises on 23 March. 12.The Applicant therefore applied to the Lands Tribunal on 12 April 2011 for a stay of repossession. She also applied for leave to appeal the two judgments of 17 March and 8 April respectively. 13.On 15 April 2011 Deputy Judge Simon Lui refused to grant leave to appeal and refused to stay the execution of the order for possession. 14.On 18 April 2011 the Respondent successfully recovered vacant possession of the suit premises through the court bailiff. According to the record of the Land Registry, back on 1 March 2011 the Respondent signed a sale and purchase agreement to sell the whole of Flat A, 6/F including the suit premises to one Lau Chun Wa. The relevant formal deed of assignment was executed on 1 April 2011. Lau Chun Wa also signed an authorisation on the same day authorising the Respondent to continue to proceed with the repossession of the suit premises from the Applicant. Application for leave to appeal 15.The Applicant commenced the present action on 20 April 2011 to apply for leave to appeal the judgment of the Lands Tribunal and a stay of execution of the said order for possession pending the conclusion of the appeal. 16.In her supporting declaration and affirmation, the Applicant alleges as follows:
17.The Respondent opposes the application on the following grounds:
18.Although Mr. Wong, Counsel for the Respondent stated in his written submission that the Applicant was in breach of contract by subletting the suit premises, he accepted during the present hearing that the tenancy agreement executed by the parties on 24 March 2010 did allow the Applicant to sublet the suit premises. Applicable legal principles 19.Section 11(2) of the Lands Tribunal Ordinance provides:
20.And section 11AA(6) provides: “Leave to appeal shall not be granted unless the Tribunal, the Court of Appeal or the registrar hearing the application for leave is satisfied that -
21.It follows from the above statutory provisions that, in order to obtain leave to appeal, the Applicant must show that the judgment of the Lands Tribunal is erroneous in point of law and that her intended appeal has a reasonable prospect of success or there is some other reason in the interests of justice why the appeal should be heard. Reasons for judgment of the Lands Tribunal 22.The Lands Tribunal entered judgment in favour of the Respondent on 28 February 2011 on the basis that the Applicant did not file a Notice of Opposition within the specified time. 23.On 17 March 2011 the Lands Tribunal dismissed the Applicant’s application to set aside the judgment of 28 February, the main reason being that the Tribunal did not accept the Applicant’s allegation that she signed the surrender agreement under pressure and involuntarily for fear of arrest by the police. The Tribunal ruled that the surrender agreement was valid and the Respondent was therefore entitled to apply to the Tribunal for recovery of vacant possession of the suit premises. The Tribunal also ruled that the Applicant did not have any real defence to the Respondent’s application. 24.Subsequently, the Lands Tribunal dismissed the Applicant’s application for review on 8 April 2011. Apart from the above-mentioned reasons, the Tribunal also pointed out that, as regards the Respondent’s failure to pay compensation to the Applicant in accordance with the surrender agreement, payment of compensation was not a condition precedent to the delivery of vacant possession, and although the Applicant could claim the compensation by separate proceedings, it did not constitute a reason for setting aside the Tribunal’s judgment. Our views 25.It was on the basis of the surrender agreement that the Respondent applied to the Lands Tribunal for recovery of vacant possession of the suit premises from the Applicant. As a matter of law, the Respondent was seeking from the Tribunal an order for specific performance of the surrender agreement by the Applicant. This being the case, the Respondent had to first show that it was ready, willing and able to perform its part of the obligations under the contract, namely to pay compensation to the Applicant. Hence the Respondent should have expressly indicated in the Lands Tribunal application form that it would pay to the Applicant the compensation stipulated in the surrender agreement. The Respondent could of course have sought to deduct from the compensation the arrears of rent or mesne profits and water and electricity charges held to be payable by the Applicant. And when the Respondent applied for judgment in its favour to be entered, it should have paid into the Tribunal the compensation or balance thereof to which the Applicant was entitled, in order to show that it was indeed willing and able to perform its obligations under the contract. Even if the Respondent did not pay the sum into the Tribunal, it should have undertaken to the Lands Tribunal that, having obtained judgment in its favour, it would pay into the Tribunal the compensation or balance thereof after deducting the arrears of rent/mesne profits and water and electricity charges adjudged to be payable to the Applicant. 26.In dismissing the Applicant’s application for review of the judgment, the Judge pointed out that payment of compensation was not a condition precedent to the delivery of vacant possession. We accept that paying compensation and delivering up vacant possession are two separate and distinct contractual duties. But this only means that the Applicant could not refuse to move out and deliver up vacant possession on 23 January 2011 as stipulated in the surrender agreement on the ground that she had not received the compensation. This has nothing to do with the legal principle that, in relying on specific performance as its cause of action, the Respondent had to show that it was ready, willing and able to perform its part of the contractual duties. With respect, therefore, we do not accept the Judge’s failure to take into account or deal with the issue of non-payment of the compensation by the Respondent, and we do not agree with the Judge’s view that the Applicant should seek recovery from the Respondent by separate proceedings. In our view, it constitutes an error in point of law which justifies the grant of leave to appeal to the Applicant. 27.As to the Applicant’s allegation that the water and electricity supplies of the suit premises were disconnected and she was under pressure and had no alternative but to agree to sign the surrender agreement, the Judge rejected it after considering the Applicant’s affirmation and submission. This is a finding of fact, and the Applicant is now merely reiterating what she said before. Her ground of appeal in this regard does not involve a point of law and hence fails to satisfy the requirement of section 11(2) of the Lands Tribunal Ordinance. 28.Furthermore, as the Respondent has repossessed the suit premises, the Applicant cannot possibly ask for a stay of execution of the order for possession. At the same time, as the Respondent has sold the whole of Flat A on 6/F including the suit premises, the Applicant cannot possibly seek to move back to the suit premises. 29.As regards the Applicant’s application for an order requiring the Respondent to compensate for the Applicant’s loss and damage as a result of early termination of the tenancy agreement, this is not an issue with which the judgment of the Lands Tribunal is concerned. The Applicant cannot make this application in the present application for leave to appeal. Our judgment 30.In view of the above analysis, we grant the Applicant leave to appeal. With the consent of the parties, we treat the present application as the appeal proper. 31.In our judgment, the Respondent is entitled to vacant possession of the suit premises but shall at the same time pay to the Applicant the compensation stipulated in the surrender agreement, although the Respondent shall be entitled to deduct therefrom the sums payable but not yet paid by the Applicant. 32.By the surrender agreement, the Respondent agreed to relieve the Applicant of rent and water and electricity charges from 24 December 2010 to 23 January 2011. However, the Applicant did not deliver up vacant possession of the suit premises on 23 January 2011, as a result of which the Respondent was unable to recover vacant possession until 18 April 2011 with the assistance of the court bailiff. For this reason, the Applicant has to pay mesne profits from 24 January to 18 April at a monthly rate of $2,600, totalling $7,367 ($2,600 X 2 33.The Respondent has confirmed through Mr. Wong of Counsel that the Applicant paid $2,800 on 24 March 2011. In addition, one Teng Wai Mei (transliteration) (滕惠美), the Applicant’s sub-tenant, has deposited $5,600 to the account of Lam Ming Chung, a director of the Respondent. Mr. Wong pointed out that Madam Teng is now seeking to recover this sum from the Respondent and stated that she was not paying rent on behalf of the Applicant. The Respondent therefore contended that in considering whether the Applicant has fully paid the mesne profits from 24 January to 18 April this deposit of $5,600 should not be counted. We accept that in the absence of any confirmation by Madam Teng, this deposit of $5,600 should not be regarded as mesne profits paid on behalf of the Applicant. 34.Therefore, after deducting the $2,800 paid by the Applicant, the mesne profits payable by the Applicant to the Respondent are $4,567 ($7,367 - $2,800 = $4,567). 35.Pursuant to the judgment entered on 28 February 2011, the Applicant is also liable to pay $187 being water and electricity charges. 36.The Respondent also stated that it has been necessary to enlist the assistance of the court bailiff, and hence to incur bailiff fees in the sum of $678, in order to effect repossession of the suit premises. We accept that these fees should be borne by the Applicant. 37.In short, from the compensation of $15,600 payable to the Applicant, the Respondent is entitled to deduct the said mesne profits of $4,567, water and electricity charges of $187, and bailiff fees of $678. After these deductions, the compensation payable to the Applicant by the Respondent is $10,168 ($15,600 - $4,567 - $187 - $678 = $10,168). 38.As regards costs, in our view a fair approach is not to make any order as to costs both before the Lands Tribunal and before this Court, which means that the Applicant and Respondent shall each bear their own costs. Conclusion 39.For the above reasons, we make the following orders:
The Applicant (Appellant), acting in person, present. Mr. Adrian Wong, instructed by Messrs. Tse Yuen Ting Wong, for the Respondent. Translated by the Judgment Translation Unit of the Judiciary and approved by Mr. Edmund Cham, Solicitor. | |||||||||||||||||
= $7,367).Cases cited in this judgment
Further hearings and rulings under HCMP 737/2011