Lau Chi Keung v. Colquhoun Brian

LDPD 1447/2013

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO. 1447 of 2013

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JUDGMENT

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Background

1.The Applicant is the registered owner of 1/F & 2/F, No. 142 Yuen Leng, Tai Po, New Territories also known as Lot 1644 in DD 9 (“the Premises”). By a tenancy agreement dated 23 November 2012 (in both English and Chinese), Madam YEUNG Lin Tai, Carey (“Mrs. Lau”) acting as representative of the Applicant agreed to let the Premises to the Respondent for a term of 2 years commencing from 15 December 2012 to 14 December 2014 at a monthly rent of $14,500 in advance (inclusive of rates and Government Rent) (“the Tenancy”).

2.The other relevant clauses in the Tenancy in issue are:

Clause 1: “The Tenant shall pay to the landlord the rent in advance on the day of each and every calendar month during the Term. If the Tenant shall fail to pay the Rent within the due date, the landlord shall have right to institute appropriate action to recover the rent and all costs, expenses and other outgoings so incurred by the landlord in relation to such action shall be a debt owed by the Tenant to the Landlord and shall be recoverable in full by the Landlord.”

Clause 6: “The Tenant shall during the term keep the interior of the Premises in good and tenantable repair and condition (fair wear and tear and damage caused by inherent defects excepted) and shall deliver up vacant possession of the Premises in the same repair and condition on the expiration or sooner determination of this Agreement”

Clause 8: “Provided the Tenant shall have paid the Rent and other outgoings on the days and in the manner herein provided and observe and perform the terms and conditions herein contained and on the Tenant’s part to be observed and performed, the Tenant shall peacefully hold and enjoy the Premises during the term without any interruption by the Landlord.”

Clause 9: “The Landlord shall keep and maintain the structural parts of the Premises including the main drains, pipes and cables in proper state of repair Provided that the Landlord’s liability shall not be incurred unless and until written notice of any defect or want of repair has been given by the Tenant to the Landlord and the Landlord shall have failed to take reasonable steps to repair and remedy the same after the lapse of a reasonable time from the date of service of such notice.

Paragraph 5 in Schedule II : “The rental hereby reserved is inclusive of the built-in installations, 6 air-conditioners (with remote control), 2 water heaters, 1 extractor hood, 4 exhaust fans, 1 cooker.”

Remark No. 3 in Schedule II : “Tenant accepts the current condition of as (sic) sight”

3.The Applicant’s claim herein is for recovery of possession of the Premises and arrears of rent since 15 June 2013 and for order for mesne profits (to the date of delivery of vacant possession of the Premises). In addition, the Applicant also claims for remaining rental resulting from the early termination of the Tenancy, for mesne profit in respect of the use and enjoyment by the Respondent of a car park belonging to the Applicant in the sum of $500 per month and other loss resulting therefrom, other damages, interest and costs.

The Defence

4.Basically, the Respondent submits that the Applicant has been in breach of the Tenancy in the first place. Firstly, the Respondent submits that the Tenancy is inclusive of 1 car parking space outside the Premises but the Applicant failed to arrange it to be available to him for a period about 3 months since February 2013 or so. Secondly, the Respondent complains that since January 2013, on no less than eight occasions, more than once every month during the tenancy, the electricity power supply went off, and on a number of occasions for a period in excess of 18 hours. Electrician was instructed by the Applicant to look into the matter and the problem has not been resolved leaving the Master Bedroom and the ‘en suite’ bathroom, for instance, on the 2^nd Floor without electricity supply. Owing to the above breaches by the Applicant, the Respondent admits, he has withheld rental payments since 15 June 2013.

5.In respect of the first complaint, the Respondent called Mr. NGAI Tak Wing Benny (“Mr. Ngai”), the estate agent with Gold Field Property Agency Limited who assisted the parties to enter into the Tenancy, to give evidence. According to Mr. Ngai, Mrs. Lau verbally agreed to let the Respondent have the right to use the parking space in question (which Mr. Ngai supposes is located on Government land) but as the Respondent did not have a car at the time when the Tenancy was signed and the parking space was occupied by a relative of the Applicant, the use of the parking space was not included in the Tenancy. But after the Respondent had occupied the Premises for 3 weeks, the Respondent got a company car from his company and then asked Mr. Ngai to contact Mrs. Lau to release the car parking space to him. Mr. Ngai said Mrs. Lau did so but in May 2013, he learnt from the Respondent that someone else occupied the parking space again.[1] Simultaneously, Mrs. Lau and the Respondent had dispute on the power system and the Respondent suggested to claim compensation from the Applicant. It was Mr. Ngai’s evidence that according to his manager, a Mr. Lee, Mrs. Lau had called his company and suggested that if the Respondent stop claiming her on the power supply issue, she would release the car parking space for the use of the Respondent.

6.Mrs. Lau admits that when the Premises were first listed for rent, she had suggested the tenancy agreement would include the use and enjoyment of a car parking space outside the Premises. However, according to Mrs. Lau, during the negotiation process, the Respondent requested her to reduce the monthly rent from $15,000 to $14,500 as he did not have the car at that moment and she agreed. For this reason, the car parking space was purposely excluded from the Tenancy; Mrs. Lau also submits that the tenancy agreement was signed by the Respondent first before it was delivered by Mr. Ngai to her to sign it.  Mrs. Lau denies she has ever any relative occupying the car parking space which is unfenced and open to parking. Mrs. Lau does put to Mr. Ngai during cross-examination that she had specifically asked not to include the car parking space in the Tenancy and Mr. Ngai agrees.[2] Mrs. Lau does admit that in May 2013, she had verbally let out the space to someone else at a charge of $500 per month but when Respondent had quarrelled with this tenant/licensee regarding the use of the space, the letting has been cancelled.

The Law

7.In the absence of express agreement, the common law does not imply into a lease a condition or term that the property is fit for the purpose for which it is let.  Accordingly, a tenant takes the property subject to any defects existing at the time of the letting, and to any events that subsequently affect its value: see also Remark No. 3 in Schedule II to the Tenancy. Accordingly, even where the property has become useless to the tenant by reason of the landlord’s neglect of an obligation to repair, the rent continues to be payable: see Halsbury’s Laws of Hong Kong,  Vol. 17(1) (LexisNexis, 2007 Reissue) para. 235.213. 

8.Further, in the absence of express agreement to the contrary, the covenant to pay rent has been regarded as independent of the other covenants or obligations under a lease, including, for example, the covenant for quiet enjoyment: Edge v. Boileau and Others [1885] 16 QB 117, see also Taylor v. Webb [1937] 2 KB 283; Charmway Development Limited v. Long China Engineering Limited [2001] 3 HKC 515.  A tenant’s obligation to pay rent is not dependent upon the compliance by the landlord of its obligations under the tenancy:

9.The Respondent’s obligation to pay rent is set out in Clause 1 of the Tenancy. It is not expressed to be subject to or conditional upon compliance by the Applicant of all or part of its obligations thereunder. There is therefore no room for the defence asserted by the Respondent that he is not obliged to pay rent or the Applicant is not entitled to rent by reason of the alleged breaches of the tenancy on the Applicant’s part. The Respondent's failure and refusal to pay rent since 15 June 2013 constitutes a breach of the covenant to pay rent that entitles the Applicant to apply to forfeit the tenancy.     

10.As regards whether the car parking space is included in the Tenancy, I tend to agree with Mrs. Lau’s version of fact because the parties should not have allowed the car parking space not to be included upon signing the Tenancy when the parties had taken the trouble to insert other items, for instance, in the Schedule to the Tenancy. The general rule is that a person is estopped by his or her deed, and although there is no such estoppel in the case of ordinary signed documents, a party of full age and understanding is normally bound by his signature to a document, whether he reads or understands it or not.  To the extent that the Respondent is relying on non est factum, it can only be pleaded where the signer had made a fundamental mistake as to the character or effect of the document. The degree of difference that must exist between the document actually signed and the document it was believed to be has to be “radical”, “essential”, “fundamental” or “very substantial”. Negligence or carelessness on the part of the person signing the document excludes the defence of non est factum.[3] Similarly, a person who is ignorant of (as opposed to being mistaken about) what he is signing cannot plead non est factum. See Halsbury’s Laws of Singapore, Vol. 7 (LexisNexis, 2005 Reissue) at paras 80.169-80.171. In any event, the value of the car parking space, on the evidence available, is more or less in the region of $500 per month. When compared with the rental reserved at $14,500 per month, the omission of it in the Tenancy cannot, in my opinion, be regarded as “fundamental” or “very substantial”. On the basis of the evidence, the mere promise by Mrs. Lau, if any, to the Respondent for the use of the car parking space is independent of the Tenancy especially when signing the Tenancy on 23 November 2012, the Respondent had no urgent need for using it.

11.The Lands Tribunal may only, in an application for possession or ejectment, make an order for the payment of damages in respect of breach of a condition of the tenancy (see section 8(8) of the Lands Tribunal Ordinance, Cap. 17). A counterclaim, if any, in respect of the problem of the electricity supply is generally treated as an independent action (see Hong Kong Civil Procedure 2013, paragraph 15/2/4). 

Other Claims by the Applicant

12.The Applicant also claims for remaining rental for early termination ofthe Tenancy. However, whereas the Respondent is still occupying the Premises, there cannot be any evidence of the extent of the damages suffered by the Applicant and the steps taken following the early termination of the Tenancy to mitigate loss.  I dismiss this claim for want of evidence.

13.For the same reason, I dismiss the claims alleged by the Applicant for the Respondent’s other breaches of the Tenancy.

14.As I have found in paragraph 10 above that the car parking space is not included in the Tenancy, this Tribunal has no jurisdiction to deal with the claim by the Applicant for mesne profit in respect of the use and enjoyment by the Respondent of the car parking space.

15.In respect of the arrears of rental payment, I find no provision in the Tenancy that interest thereon is payable.

Order

16.This is my order:

1. Subject to paragraph 4 below, the Respondent do deliver vacant possession of the suit premises to the Applicant;

2. The Respondent do pay the Applicant arrears of rent/mesne profits at the rate of $14,500 per month from 15June 2013 until delivery up of vacant possession;

3. The Respondent do pay the Applicant the costs of this Application which is summarily assessed at 500; and

4. If the Respondent should on or before 8 August 2013 (“Relief Expiration Date”) pay into the Tribunal all the arrears of rent/mense profits as stated in paragraph 2 above (including all arrears of rent/mense profits due on or before the date of payment) together with the costs referred to in paragraph 3 above, the Respondent be relieved from the forfeiture incurred herein, and the Tenancy of the suit premises be reinstated;

5. Unless otherwise ordered, all sums ordered to be paid under this judgment shall be paid into the Tribunal in cash, by cashier orders issued by banks in Hong Kong or by cheques drawn by firms of solicitors in Hong Kong, and such sums received by the Tribunal shall be released to the Applicant.

The Applicant, unrepresented

The Respondent, unrepresented

[1] In this regard, the Respondent submits that during the intermediate period, somebody claiming to be the relative of the Applicant had occupied the car parking space intermittently.

[2] Mr. Ngai admits his manager has reminded him that next time, he should insist on including everything agreed by the parties into the tenancy agreement.

[3] Where the Respondent has signed the Tenancy under a misapprehension as to the essential nature of the transaction, he may be ‘estopped’ by negligence from pleading the defence of non est factum.