Fordtime Industrial Ltd v. Yip Shing Lam t/a Traditioal Chinese Noodle
Read the full judgment text of LDPE 757/2012 on BabelCite. This LDPE judgment was delivered on 9 October 2013.
1. By the New Grant No. 4931 (page 572-589 Bundle), Tsuen Wan Town Lot No. 195 was granted to Ping Hing Hong Limited (“PHH”) on 19 April 1971. A building was being erected on the lot known as Tsuen On Building at No. 20-24 Lo Tak Court, Tsuen Wan (“the Building”).
Cites 3 cases
|
LDPE 757/2012 IN THE LANDS TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION APPLICATION NO. LDPE 757 OF 2012 _________________
_________________
_________________ J U D G M E N T
Undisputed or IndisputableBackground 1.By the New Grant No. 4931 (page 572-589 Bundle), Tsuen Wan Town Lot No. 195 was granted to Ping Hing Hong Limited (“PHH”) on 19 April 1971. A building was being erected on the lot known as Tsuen On Building at No. 20-24 Lo Tak Court, Tsuen Wan (“the Building”). 2.According to the Approved Building Plan dated 17 March 1971 (page 640-643 Bundle) and confirmed by the joint expert (“Mr. Tse”), the Building is of 6 storeys served by a common staircase opening onto a side lane and with no opening from the Building onto the main road. There are 2 units on the Ground Floor level and 3 units on each of the upper floors. From the Ground Floor Plan and Upper Part of Ground Floor Plan, there is no mezzanine floor or cockloft above the Ground Floor which has a floor-to-floor height of 16 feet 6 inches from floor to the underside of the floor slab of 1st Floor. Enquiries made by Mr. Tse with the Buildings Department showed that there was never any approved alteration and addition works requested in the Building (page 45 Bundle). 3.The Occupation Permit (“OP”) dated 24 May 1972 (page 134 Bundle) showed that there should be 2 shops for non-domestic use on the Ground Floor and 3 flats per floor on 1st to 5th floor for domestic use. 4.A Deed of Mutual Covenant (“DMC”) was made on 21 August 1973 (page 135-145 Bundle) vesting 1 undivided share of the Building to one Au Young Mo Ching (“AY”) for “Flat B on the 4th Floor” of the Building and 21 undivided shares assigned to PHH for “All portions of the said building including the Roof and external walls (except Flat B on the 4th Floor)”, making a total of 22 undivided shares. The DMC is silent as to the breakdown of the undivided shares assigned to PHH. 5.According to the land search record and/or assignment produced by the parties in this case, the Upper Part of Ground Floor had been assigned to different owners all these years.
6.From the plans attached to the respective assignments, it can be seen that one of the 2 Ground Floor Shop had been divided into 2 parts, Shop A in the front portion and Shop B in the back portion. Shop A and B together are known as Shop 1 whilst the other Ground Floor Shop is named Shop C. 1 Undivided share was being assigned to Shop 1 and Shop C respectively. As far as the cocklofts are concerned, the Upper Part of the Ground Floor had been divided into 4 portions forming Cockloft A to D, each having 1 undivided share. Cockloft B and D are on the upper part of Shop C, Cockloft A covered half of the Upper Part of Shop A and Cockloft C covered the entirety of Shop B and part of Shop A (page 161 Bundle). 7.Apart from the entrance opened onto the side lane, the Building now stands had an additional opening between Shop 1 and Shop C from the main road with a flight of staircase leading up to the common landing of Cockloft A to D. Each cockloft has its own doorway from the common landing (photo no. 7-13 of the Supplemental Expert Report Exhibit A2 and pages 48-50 and 57-59 Bundle). Cockloft B is being occupied by a trading company whilst Cockloft D is being occupied by a beauty parlour. Shop 1 is occupied by the respondent and Shop C was being rented out for the business of an electronic game centre. 8.Shop 1 was assigned to Wide Famous Holdings Limited (“Wide Famous”) on 29 May 2002 and the respondent is one of the directors of Wide Famous. Upon acquisition, Shop 1 was being used by the respondent for the business of a noodle shop and the layout of the shop had never been altered. There was false ceiling on the front portion of Shop 1 which is being used as the dining area where customers were being served. The kitchen is located at the back portion of Shop 1 with no false ceiling and with a ceiling height of over 16 feet (photograph 1- 6 Exhibit A2). 9.In April 2005, a Mr. Cheng claimed to be representing Venture King, the owner of Cockloft C, came to Shop 1 with the Assignment and Floor Plan asking to inspect the space above the false ceiling inside Shop 1. Upon inspection, Mr. Cheng said that the cockloft was no longer there and asked if the respondent had demolished the same. The respondent denied and insisted that the premises was in that condition without any cockloft on his purchase. Mr. Cheng offered to lease out Cockloft C to the respondent. Since the respondent was well aware that he would not be able to obtain the food licence for the business with the cockloft built above the kitchen area, he agreed to the suggestion of a tenancy. Hence, a tenancy agreement was signed by the wife of the respondent and Venture King on 20 April 2005 (“T/A”) (page 108 Bundle). 10.The T/A covered the period from 1 May 2005 to 30 April 2011. The remarks of the T/A reads as follows :
11.It is the case of the respondent that the Remarks was not on the T/A when his wife signed on it and it was only after the respondent received a copy of the signed T/A then he discovered that the Remarks was being added onto it. In any event, it is the respondent’s evidence that upon enquiry with Mr. Cheng, the respondent accepted the terms of the Remarks, though not without reluctance. 12.The applicant becomes the registered owner of Shop C and Cockloft C of the Building on 29 June 2009. The acquisition is subject to the T/A. The respondent had arranged for the rent to be paid to the applicant upon notified of the change of ownership. 13.In February 2011, discussion about renewal of the T/A turned out to be unsuccessful. The respondent failed to pay rent since 1 May 2011, i.e. upon expiry of the T/A. And despite repeated demand from the applicant, the respondent remained in occupation till present. 14.By a Notice of Application dated 7 August 2012, the applicant claims against the respondent for :
15.The respondent, in its Amended Notice of Opposition filed on 11 September 2012, contended that the T/A was being signed under the misrepresentation by the representative of Venture King that Cockloft C did exist and was owned by it. In fact, Cockloft C was never in existence since no cockloft ever appeared on the Building Plan, the OP as well as the DMC which rendered the T/A void and of no legal effect. 16.At trial, the following issues are raised by the respondent :
Existence of Cockloft C 17.At this hearing, it is the contention of the respondent that Cockloft C had never been in existence. I found this contention cannot stand in view of the circumstantial evidence in this case. 18.Even though the Building Plan did not show a physical floor slab separating the cocklofts on the Upper Part of Ground Floor from the Ground Floor, the Building Plan did show the ground floor being divided into Ground Floor and Upper Part of Ground Floor. There may not be a floor slab shown on the Building Plan, but one cannot deny the existence of the Upper Part of Ground Floor which is where the 4 cocklofts located. 19.It is clear from the land registration document that PHH had first assigned its interests in the Upper Part of Ground Floor which turned out to be the 4 cocklofts to different entities in 1978 and 1979. No issue had been taken about PHH’s entitlement to assign its interests in the undivided shares to others. According to the case of Hinex Universal Design Consultants C Ltd v Chan Lai Hing [1998] 1 HKC 317,
20.For the purposes of division of land, it was never the common law that any physical barrier was necessary to separate the divided lots of land. But the 4 cocklofts were subject of a number of transfer after their first assignment by PHH, Cockloft A having 7 subsequent sales, Cockloft B having 5 subsequent sales, Cockloft C having 3 subsequent sales and Cockloft D having 4 subsequent sales. It would be beyond belief that all those purchasers in these sale transactions would be prepared to spend a fortune in acquiring just a void in the Upper Part of Ground Floor. 21.If the 4 cocklofts are only a void above the ground floor shop, why was there a need for another entrance and staircase to be built for access from street level to the cocklofts, and only to the cocklofts. According to Mr. Tse, the entrance and the staircase are also unauthorised work since these were not found on the Building Plan. There is also no dispute that there are partition wall built for Cocklofts B, C and D, each having its own doorway and with common staircase and landing erected on the Ground Floor and Upper Part Ground Floor level of the Building. It would be absurd for all these structures to be built without a floor slab for the cocklofts separating them from the ground floor shops. The only reasonable inference to be drawn must be that the 4 cocklofts are not void but each having partition and floor slab and its own doorway built to make it a separate unit with separate entrance and staircase distinct from the ground floor shops. 22.And Cockloft B and D did have a floor slab separating it from the Ground Floor shop. It would be absurd for the floor slab to be built just for Cockloft B and D but not for Cockloft A and C. From the description of Mr. Tse about what he saw on the site visit, one will have no difficulty in coming to the conclusion that the 4 cocklofts are there to form another level of the Building. It is more likely than not that there was a floor slab for each of the 4 cocklofts. 23.And if there was never a floor slab for Cockloft C, why did Mr. Cheng of Venture King asked to see above the false ceiling on first visit and upon inspection, accused the respondent of removing the floor slab. This must mean that there was originally a floor slab there to explain the conduct of Mr. Cheng. And this also explained why the Remarks was being inserted into the T/A. 24.All these circumstantial evidence points to the conclusion that, it is more likely than not that Cockloft C should have a floor slab but such had been removed. 25.The creation of the 4 cocklofts on the Upper Part of Ground Floor may not be in line with the Building Plan or the OP. Building plans merely tell how a building should be built and the OP just tells the purpose of use of the building. Whilst the OP and the Building Plan are concerned with building regulation, there is nothing in the Building Plan or the OP to suggest that breach of the OP or contravention of the Building Plan would invalidate the creation of a tenancy agreement of these cocklofts. 26.As for the DMC, it is the respondent’s case that for the applicant to claim to be the rightful legal owner of Cockloft C and entitled to its vacant possession, the applicant must demonstrate to this court that it had obtained the proprietary interests in the Building and is entitled to the exclusive possession of Cockloft C. Whether the owner is entitled to the exclusive possession of any part of a building is dependent upon the terms of the DMC (Kung Ming Tak Tong Co Ltd v Park Solid Enterprises Ltd (2008) 11 HKCFAR 403 at 421B). It would be a prerequisite to the applicant’s claim for it to show that not only is it the owner of the undivided shares in the Building, it also acquired the exclusive possession to Cockloft C by way of the DMC. The conferment of exclusive possession by the assignment is subject to the terms of the DMC. The DMC of the Building could never intended to allocate any right to exclusive possession of Cockloft C to anyone since it did not physically exist at the time and nowhere in the First Schedule of the DMC mentioned anything about cocklofts. Had exclusive possession of the cocklofts been assigned to Cockloft C, this should have been specifically spelt out in the DMC. What’s more, Clause 3(b) of the DMC (page 137-138 Bundle) had listed out other specific part of the Building but there is no reference to cockloft. So it must be that the cocklofts were never in existence. 27.I found such a contention by the respondent unfounded. Mr. Nip for the respondent is relying heavily on the fact that Cockloft C had never been named or mentioned in the DMC. The 1st Schedule of the DMC is the provision which provided for the particulars of owners and the portion of the Building each owner is entitled to have exclusive use, occupation and enjoyment. In the 1st Schedule, PHH was assigned the exclusive possession of “all portions of the Building including the Roof and external walls” except the unit assigned to AY. Although there is no detail as to what are the “all portions” of the Building, when one referred to the Building Plan, it must mean all the other parts referred to in the Building Plan. The Upper Part of Ground Floor is specifically named in the Building Plan. It must form “portion” of the Building. So, even though the word “cockloft” is not being used in the DMC, it is clear from the DMC that the Upper Part of Ground Floor where the cocklofts were situated, was indeed included as part of the portion of the Building which PHH had the exclusive right of use, possession and enjoyment. 28.As for Clause 3(b) relied upon by Mr. Nip, I do not agree that such a clause is defining the other “portion of the Building” referred to in the 1st Schedule. Clause 3(b) reads as follows :
29.From the wordings of Clause 3(b), it is clear that it stipulated the obligation of each owner to contribute to the expenses of upkeeping certain part of the building. From the fact that each owner is required to contribute to the expenses named in the clause, the different parts of the building mentioned must be common facilities or common parts of the Building and is never intended to mean any part of the building which an owner has an exclusive right. The proviso in Clause 3(b) to require the owner who had exclusive right to a particular part of the roof to be responsible for that particular part on his own supports the conclusion that the parts of the Building mentioned in Clause 3(b) are common parts instead of parts which an owner has exclusive possession. 30.Moreover, Clause 6 of the DMC (page 139 Bundle) specifically provided for the obligation of each owner in paying for the expenses of upkeeping and maintenance of the part of the Building to which the owner had exclusive use occupation and enjoyment. So Clause 3(b) cannot be referring to the other “portion” an owner had exclusive possession. 31.In any event, it cannot be said that since no cockloft had been mentioned in clause 3(b), this means no cockloft had been in existence. It is beyond argument that the Upper Part of Ground Floor was in fact in existence as shown on the Building Plan and Cockloft C forms part of the Upper Part of Ground Floor. 32.I found as a fact that Cockloft C did exist with a floor slab which had been removed at some stage. The T/A between the applicant and the respondent is a valid one. Estoppel 33.In any event, I found the respondent should be estopped from denying the right of the applicant in granting a valid T/A. 34.The doctrine of estoppel is clearly set out in the case of Tang Man Kit & Foo Tak Ching & Hip Hing Timber Company Limited (CACV 137/02 13 May 2005). In that case, the Court of Appeal stated :-
35.Mr. Nip for the respondent submitted that the doctrine of estoppel is only applicable if the applicant had mistakenly believed that it was the owner or that the property belonged to a third party. As can be seen from the passage quoted above, the principle of estoppel prevents a tenant from denying the landlord’s entitlement to the property. It is applicable, not only in cases where there is a third party claim but also in circumstances where the landlord’s title is put in issue. Under this principle, the right of the applicant as landlord and as person entitled to possession to recover the land can hardly be challenged. 36.The respondent is alleging that since Cockloft C had never been in existence, the applicant had no title to it and not entitled to enter into a valid tenancy agreement. In such circumstances, the doctrine of estoppel is clearly applicable to stop the respondent from denying the existence or validity of the T/A on these grounds. 37.The respondent had entered into the T/A with Venture King since 2005 and had been performing the terms of the T/A all these years. His use had never been disturbed by any adverse claim. The respondent should be estopped from denying the existence of Cockloft C and/or a valid T/A now that the applicant exercised its right as the landlord for possession of Cockloft C. Jurisdiction under the LTCO 38.The respondent submitted that since this claim by the applicant is one brought pursuant to Section 127A of the LTCO, the Tribunal would only have jurisdiction to adjudicate this claim if Cockloft C constitutes “premises” which for the purpose of Section 127A required a physical part of a building. 39.The following terms in Section 2 of the LTCO are relied upon by the respondent to support the contention that “premises” necessarily connotes a physical part of a building, such as a room or a cubicle :
40.In view of my findings above that Cockloft C did exist and had a floor slab which had been removed, the respondent’s contention that Cockloft C is not physically in existence and cannot be “premises” under the LTCO must fail. 41.Even if I am wrong in my findings above, I do not agree that the definition of “premises” under the LTCO must connote a physical part of a building, as submitted by the respondent. The definition of “premises” under LTCO just referred to the “subject matter of any tenancy” and there is nothing touching upon any requirement as to the physical state of the premises. And the definition of “domestic premises” includes “bed space” which apparently does not involve any physical part of a building. I found the contention by the respondent not supported by these definitions. 42.Cockloft C, being the subject matter of the T/A between the applicant and the respondent, must fall within “premises” under the LTCO, i.e. being the subject matter of the T/A. 43.Mr. Nip also relied upon the judgment of Gonwah Properties Ltd v Nam Ah Restaurant [1987] 3 HKC 371 to say that the Tribunal in that case had also found that “premises” under LTCO required a physical building. I beg to differ. The case of Gonway involved an application for authorization to sell a piece of land after all tenants agreed to surrender their various premises in consideration for compensation payable by the landlord in that case. The law stated that in such circumstances, the landlord is deemed to have obtained orders for possession under the LTCO and became subject to the restrictions against assigning the premises within 24 months. The old building on the land was demolished subsequently with a new building erected. In order to sell the land as well as the building under construction without contravention of the restriction, an order from the court is required. Downey DJ drawing an analogy from the definition of “premises” in LTCO, found that the restriction was only to prohibit any dealing with the premises of the order for possession and not with the land or the new building erected, and concluded that the restriction is not applicable and no authorization is required. It is also observed by Downey DJ that since the building had been demolished, the premises ceased to exist both in fact and in law. 44.Downey DJ had not made any findings that the “premises” under LTCO must involve a physical part of a building. Rather, it is only found that “the premises can only refer to the premises which form the subject matter of the order for possession or the order refusing to grant a new tenancy” (at page 374). The observation about the existence of the premises is to justify the conclusion that since the subject matter of the order for possession is no longer in existence, the tribunal is given no jurisdiction to authorize any dealing in such premises. In no way can this be understood to mean that “premises” under LTCO required a physical building. 45.In any event, even if I am wrong in my findings concerning LTCO, the wordings of Section 8(6) of the Lands Tribunal Ordinance (“LTO”) reads :
46.I found the respondent’s contention on jurisdiction must fail. Conclusion 47.Having considered all the arguments raised by the respondent, I found the relationship between the parties in this case are that of landlord and tenant governed by the T/A. Upon expiration of the terms of the tenancy, the applicant is entitled to have vacant possession of Cockloft C. Since the respondent had been holding over upon expiry of the T/A without any payment, the applicant is entitled to claim for mesne profits from the respondent. Jurisdiction to grant an order for specific performance 48.The applicant is asking for an order for the respondent to reinstate the floor slab of Cockloft C. The respondent submitted that this Tribunal has no jurisdiction to grant an order for specific performance. It is not in dispute that Section 8 (8) of the Lands Tribunal Ordinance (“the Ordinance”) is relevant in the determination of this argument on jurisdiction. 49.Section 8 (8) of the Ordinance reads :
50.The applicant relied on Section 8(9) of the Ordinance in support of the contention that this Tribunal does have the jurisdiction to grant a specific performance order. 51.Section 8(9) of the Ordinance reads :
52.I found the applicant’s contention misconceived. 53.Section 8(8) of the Ordinance confers on the Tribunal the jurisdiction to make those orders specified in Section 8 (8)(a)-(d) when the Tribunal is dealing with an application for possession. Section 8(8) is the provision defining the Tribunal’s power to grant reliefs in its exercise of the jurisdiction in dealing with application for possession. Section 8(8)(a)-(d) are the only reliefs that can be granted. The provision of Section 8(9) empowering the Tribunal the same jurisdiction to grant remedies and reliefs as the Court of First Instance in the exercise of its jurisdiction. So Section 8(9) does not confer any additional jurisdiction on the Tribunal to exercise jurisdiction of the Court of First Instance in an application for possession since all remedies and reliefs that can be granted had already been specified in Section 8(8). To accept Mr. Siu’s submission that since the Tribunal has the jurisdiction to grant the remedies and reliefs as the Court of First Instance, the Tribunal must also have the jurisdiction to grant a specific performance order in an application for possession, is in total ignorance of the provision of Section 8(8) and treating Section 8(9) as conferring additional jurisdiction on this Tribunal. 54.I found this Tribunal has no jurisdiction to grant the relief of specific performance in an application for possession. Order 55.It is ordered that :
56.As for the assessment of mesne profits, it is directed that :
Mr. Patrick Siu, instructed by Messrs Alan Ho & Co., for the applicant Mr. Norman Nip, instructed by Messrs C. O. Yu & Co., for the respondent |
Cases cited in this judgment
Further hearings and rulings under LDPE 757/2012