Pc Fortune Company Ltd and Another v. Mastermind Asset Management Ltd

HCMP 146/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 146 OF 2014

(On an intended Appeal from DCCJ No. 4479 of 2010)

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JUDGMENT

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Hon Lam VP (giving the Judgment of the Court):

1.This is an application for leave to appeal against the judgment of Judge Stephen Chow in DCCJ 4479 of 2010 given on 9 October 2013. In that judgment, the judge after trial found in favour of the 1st Plaintiff in respect of its claim for damages arising from the forcible entry by the Defendant into its shop premises, the removal of its belongings therefrom and the wrongful termination of its tenancy. The Defendant was the landlord, after it acquired the property from the party who signed the tenancy agreement with the 1st Plaintiff. The Defendant’s counterclaim (on the basis that the tenancy of the 1st Plaintiff had lapsed) for possession was dismissed.

2.There are three main components (plus interest thereon) in the award of damages:

(a) $18,849 in respect of lost goods (see para 6 of the judgment of 9 October 2013);

(b) $5,000 the tenancy deposit (see para 19(2) of the judgment); and

(c) $159,800 in respect of loss of profit derived from rental income for the rest of the sub-tenancy (see para 7 of the judgment).

3.The Defendant applied for leave to appeal against that judgment.  Leave was refused by the judge on 8 January 2014.

4.The Defendant now applied to this court for leave to appeal.

5.The main contention of the Defendant is that the judge erred on the Land Registration Ordinance point, viz the option to renew was invalid for want of registration.  The judge decided the case on the basis that the tenancy was for a term of 6 years instead of 3 years with an option to renew for another 3 years.  We have not been referred to the relevant authorities on the construction of clauses similar to the one in the Plaintiff’s tenancy agreement.  In any event, if the tenancy was for a term of 6 years, it would be registrable and again subject to the effect of the Land Registration Ordinance.  As presently advised, we think the point is reasonably arguable. We will give leave to appeal for this ground to be canvassed.

6.We do not think that could upset the judgment for the awards under items (a) and (b).  Even if the Defendant were eventually found to be correct in the contention that the tenancy expired after 3 years (due to the invalidity of the option to renew), it should have applied for a possession order from the court instead of forcibly removing the tenant from the premises, see Clerk & Lindsell on Torts 20th Edn para 19-18 footnote 94 and Section 23 of the Public Order Ordinance Cap 245.  Thus, the Defendant is liable for damages in respect of item (a).  There is also no reason why the Defendant should not pay back to the 1st Plaintiff the tenancy deposit, thus item (b).

7.We also do not see any proper basis to support the Defendant’s proposed ground that the tenancy was terminated for non-payment of rent in light of the judge’s finding at para 4 of the judgment.  We refuse to grant leave for this to be canvassed at the appeal.

8.Therefore, we would only grant leave to appeal on the Land Registration Ordinance ground against the award of damages under item (c) set out above and the dismissal of the counterclaim.  The costs of this application shall be costs in the cause of the appeal. 

K Y Lo & Co, for the Plaintiffs

Written submissions by Mr Tony Ko, instructed by Ho Tse Wai, Philip Li & Partners, for the Defendant