Tang Fung Yiu Dora and Another v. Chong Pui Hang
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LDPE523/2014 IN THE LANDS TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION APPLICATION NO. LDPE 523 OF 2014 ________________ BETWEEN
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___________________ J U D G M E N T ___________________ 1.This is a trial to determine a preliminary issue of whether the respondent is the tenant to a tenancy agreement on which the applicants as landlord are now suing. If the question is answered in the negative it is a total defence, and the application should be dismissed. Brief background 2.The two applicants are the registered owners of Room 1709 of Park Lane Square, Tuen Mun, NT (“the premises”). It is not in dispute that by a tenancy agreement in Chinese originally dated 4th May 2010 but later re-dated 1st June 2010, the 1st applicant as landlord rented the premises to one Dance in Motion Limited (“DIM”) at a monthly rent of HK$13,800 (“1st tenancy agreement”). The respondent then signed as DIM’s representative and as witness. She was then a director and shareholder of DIM which carried on the business of teaching/promoting dancing and performing arts. 3.Apparently, it was stated in the 1st tenancy agreement that the term was for 2 years commencing 1st June 2010 and ending 31st May 2012. However, there is dispute as to the term of the tenancy. The applicants said that it was for a term of 2 years only while the respondent suggested a term of 10 years. The reasons for the dispute was perhaps because of the following handwritten remarks inserted at the end of the 1st tenancy agreement:
4.Suffice to say that for the present purpose, when the 1st tenancy agreement was stamped by the respondent on behalf of DIM, it was stamped on 29th July 2010, which was 59 days from the amended date but 86 days from the original date, for a 2-year term. An ad valorem stamp duty of HK$828 for the said 2-year term was paid on top of HK$1,656 being penalty for late stamping. 5.In or about March 2012 the 1st applicant initiated discussions with the respondent on renewal of the tenancy. She said the discussion between them took place via telephone conversation and Whatsapp, an instant messaging software commonly used by smart-phone users in Hong Kong. In the end, the tenancy of the premises was renewed at a monthly rental of HK$15,100, which was about 10% increase over the old rent, and for a term of 2 years from 1st June 2012 to 31st May 2014. The tenancy agreement was dated 1st June 2012 (“2nd tenancy agreement”). It was the applicants’ case that:
6.Both the 1st and 2nd tenancy agreements are in Chinese. It is worthwhile to note the following hand-written description of the tenant at the commencement and execution clause of the stamped 2nd tenancy agreement:
7.This time, it was the 1st applicant who stamped the 2nd tenancy agreement. It is noted that on the stamp certificate of the 2nd tenancy agreement, the 1st applicant and the respondent were described as landlord and tenant respectively. 8.It is this 2nd tenancy agreement that is the subject matter of the present dispute. The dispute as to the tenant’s identity under the 2nd tenancy agreement did not appear to surface until this 2nd tenancy agreement was due to be renewed. The respondent said she had never been given a copy of the stamped 2nd tenancy agreement but the 1st applicant said a copy had been posted to the respondent after stamping. The 1st applicant said the tenant should be the respondent in his personal capacity but the respondent said it should be DIM. 9.On 14th March 2014 the 1st applicant sent a Whatsapp message to the respondent enquiring if the tenancy would be renewed for the 3rd time. In the ensuing exchanges, the following 3 issues became apparent:
10.The respondent’s response as evidenced from her Whatsapp messages was why the increase was not capped at 10% as originally agreed. Although she had counter-offered an increase of 30%, when no agreement was reached she insisted on 10% increase and for a term of 10 years from 2010. It was not until 26 May 2014 that the respondent made it clear the tenancy was entered into between the 1st applicant and DIM, not herself personally. 11.The applicants issued the present proceedings in this tribunal on 4 June 2014 on the ground the respondent refused to move out after expiry of the 2-year term ending 31 May 2014. On 5 June 2014, the respondent filed a Notice of Opposition. It is fair to say the only substantive ground of opposition revealed therein was that there had been agreement on the term being 10 years instead of 2. A copy 1st tenancy agreement was annexed to substantiate her claim. 12.At the 1st call-over on 23 June 2014, the respondent was represented by Counsel Ms Candy Fong. She told the tribunal that the primary defence of the respondent was that a wrong party was being sued. Ms Fong also raised issues about the term of tenancy and rate of rent increase. 13.The parties were directed to file evidence. At trial it was indicated by the respondent that she was no longer a director of DIM[1]. Ms Fong stated that she was in no position to say whether DIM would be willing to be bound by the findings of facts of this tribunal on the term and rates disputed by the respondent if DIM was found by this tribunal as tenant. This tribunal therefore tries to limit its findings to the identity issue, and not extending to other issues as far as possible. The Evidence 14.Only the 1st applicant and the respondent gave evidence at trial. The respondent had through her lawyers submitted a bundle of Whatsapp conversations exchanged between them. Since they were contemporaneous correspondence, they shed light on what had actually taken place shortly before the 2nd tenancy agreement was made. Contents of the Whatsapp messages are not in dispute though the parties differed on the circumstances under which the Whatsapp messages were sent. 15.The gist of the 1st applicant’s evidence was this. She sent a Whatsapp message to the respondent on 6 March 2012 enquiring whether the 1st tenancy would be renewed, and if so, at HK$15,100. On 22 April 2012, she sent the partly filled up 2nd tenancy agreement to the respondent. She said between these 2 dates she had telephones conversations with the respondent which led to an agreement, inter alia, that the respondent entered into the tenancy in her own personal capacity; and that the handwritten terms concerning the rate of increase and the total terms be excluded and no longer be binding on them. 16.According to the 1st applicant’s evidence at trial, their discussion centred on whether old terms would be included in the 2nd tenancy agreement and who would sign as tenant. She said they discussed if the remarks concerning term and rental increase were to be incorporated, she would definitely not be reducing the rental in future even if they met a bad year like the SARS’ time. However, if the old terms were not included, the parties would be more flexible on rent which was no longer subject to any restriction. Rent could readily be reduced to reflect a declining market in case of poor economy. There were both advantages and disadvantages of including the old terms. She said the result of the various conversations was that the new tenancy would be without the old terms. Further, the respondent agreed to personally take up the tenancy to reflect the change and to avoid argument as to whether old terms would still be effective. 17.The 1st and the 2nd agreement were based on the same pre-printed ready-made tenancy agreement she bought from stationery stores. She said initially, she filled up the agreement on the basis DIM would be the tenant. Accordingly the name DIM was inserted at the commencement and execution clause of the agreement. As the discussion with the respondent went along and agreement aforesaid reached subsequently, she did not discard the filled up document. Instead, she particularly asked the respondent for her HKID number over the phone. After inserting such number beneath the description “Hong Kong Identity Card Number” at the signatory space intended for tenant she sent the filled up document to the respondent for signature. She said the respondent’s HKID number was specifically inserted to signify it was the respondent who would be the tenant as agreed. 18.The 1st applicant exhibited the stamped 2nd tenancy agreement as A-2 and the Stamp Certificate A-3. She said the partly filled up 2nd tenancy agreement sent to the respondent for signature on 22 April 2012 was exactly the same as A-2 with all insertions and deletions as they appeared now, save and except the followings:
19.When asked why the descriptions of DIM in the agreement were not crossed out when sending over the 2nd agreement on 22 April 2012, she explained it was her oversight and admitted she was careless this time. She said she was not a person who cared about details. In any event she expected the respondent to cross out the description DIM and put in her particulars as tenant. The respondent, however, did not. On the other hand, if DIM was the tenant, she would expect the respondent to cross out her HKID number as it would be irrelevant. Neither did she do so. She said she thought what had been accepted by the Collector of Stamp as tenant was most important. 20.She forgot when exactly she received the signed 2nd tenancy agreement back. According to the Whatsapp message, she accepted she might have got it by end of May 2012 as the respondent said on 20 May 2012 she had sent it back. She added that on 24 June 2012 she sent the following Whatsapp message to the respondent:
21.She said she had already made it clear to the respondent the requested personal particulars were used for stamping. The respondent therefore should be sure she would be a party to the 2nd tenancy agreement. She was of the view that if the respondent had doubts or objection over the purpose for which the personal information was asked for, she should have raised queries. She never did, and provided the information as requested. It showed, she submitted, that the respondent knew perfectly well that she would be taking up the tenancy personally. 22.She added that in the 1st tenancy agreement, the respondent signed in Chinese while in the 2nd tenancy agreement she signed in English. It can be seen, submitted by the 1st applicant, the respondent had adopted different signing patterns for her different capacities - Chinese for DIM and English personal capacity. She admitted, however, it was a mere guess as she had never been told by the respondent of such distinction, though she said it would be a reasonable guess. 23.The 1st applicant said the respondent’s Chinese name was added by her[2] to the signed 2nd tenancy agreement after she had obtained the respondent’s personal particulars via Whatsapp. It was pointed out to her that the respondent’s Chinese name and her HKID number were in fact already on the 1st tenancy agreement made in 2010. She therefore needed not ask for them again in 2012. The 1st applicant explained that since the name was subscribed by the respondent to the 1st tenancy agreement as her signature which was a sign, she was not 100% sure of the 1st respondent’s exact Chinese name. She therefore did not write it on the 2nd tenancy agreement before sending it over on 22 April 2012. She preferred a written confirmation from the respondent before writing it down for stamping. 24.The respondent’s evidence at trial can be summarized as follows:
25.The respondent also said when the unsigned 2nd tenancy agreement was sent to her, it was stipulated in clause 2 that if she wanted to renew or end the tenancy upon expiry of the term, she has to give one month written advance notice. She said it was later amended by the 1st applicant by deleting the word “壹 (meaning “one”)” and adding the word “叁 (meaning “three”)” before stamping. Discussion 26.When the term under the 1st tenancy agreement was due to expire by end of May 2012, unless there was an agreement that someone else was to take up the tenancy, it should be DIM who should be entitled to a renewed term. In fact when the 1st applicant initiated the discussion in the Whatsapp, she used the words “續約 (translation: renewal of tenancy)”. The crucial question therefore is whether the parties had come to a binding agreement that the respondent was to take up the 2nd tenancy agreement personally before 22 April 2012 as alleged by the 1st applicant. There is serious factual dispute in this respect. The determination of the dispute hinges to a large extent on the credibility of the parties. The tribunal will be doing the assessment by analysing the parties’ evidence and weighing it against undisputed or less controversial facts, contemporaneous documents such as the Whatsapps messages. 27.The 1st applicant was observed to be a person with rather strong and assertive character. She spoke eloquently and confidently in a manner which ordinary people may find it difficult to interject. She was observed by this tribunal to readily argue what appeared to her to be logical despite that it might not necessarily be so. She appears to the tribunal to be subjective but careful and meticulous. She was experienced in life and knew what she wanted. 28.On the other hand, the respondent was young and appears to the tribunal to be inexperienced in life. She was observed to be timid, unsophisticated and not orally expressive. It also appears to the tribunal that she is not the sort of person that would pay or would be able to pay attention to details. In view of her apparent lack of good re-collection, her evidence would be carefully checked with contemporaneous documents and her prior statement before this tribunal comes to its findings. 29.One obvious example is this. The respondent’s evidence as set out in §25 above suggested that it was the 1st applicant who unilaterally amended the document without her prior consent after she had already signed on it. However, in §6 of her statement, she said she had read the document sent to her and disagreed to, inter alia, the “three” months notice proposed by the 1st applicant. Obviously, it showed the amendment was already there when she got it! Her evidence in this respect was inconsistent with her prior statement, and this tribunal does not find her said evidence reliable. 30.In any event, taking into consideration of the overall evidence, this tribunal does not find her dishonest. Further, her observed behaviour tallies with her evidence that when faced with a strong character landlady such as the 1st applicant, she might not be able to handle her and would be readily to accede to request. 31.The 1st applicant said that between 6 March and 22 April 2012 she had reached agreement with the respondent that she was to personally take up the tenancy. Further, according to her, this agreement was consequent upon a prior agreement that the 10% rent increase ceiling and the 10-year term stated in the 1st tenancy agreement would not be repeated in the 2nd tenancy agreement[5]. However, on a balance the alleged agreement as to identity appears inconsistent with the undisputed contemporaneous evidence of this case:
32.On a balance, the respondent’s case on identity of tenant is more consistent with the contemporaneous Whatsapp exchanges of the parties:
33.It is the 1st applicant’s case that the respondent backed out from their prior agreement because they failed to agree on the rent for the third term. Had the rent been agreed, she said, the respondent would not have raised issue over the tenant’s identity. The respondent denied. She explained that she did not want to quarrel if the increased rent was affordable and could be agreed. 34.From the Whatsapp message it was true that she had ever counter-offered[13] a rent increase of 30%, contrary to her primary position of there being a 10% cap. However, it is noted that on 14 March 2014 when the 1st applicant first offered $25,000 per month for the 3rd term, the respondent’s instantaneous response was why such increase exceeded 10% as previously agreed[14]. Her gut reaction apparently was based on the 1st tenancy agreement still prevailing. This tribunal therefore did not consider the respondent’s responses inconsistent with a finding that there was no prior agreement alleged by the 1st applicant. The respondent’s explanation is, in the tribunal’s view, acceptable and not inconsistent with the Whatsapp exchanges. 35.On a balance, this tribunal did not believe that the HKID number of the respondent was written on the unsigned agreement before it was sent over to the respondent on 22 April 2012. However, even if this tribunal were wrong and it were there prior to its sending over, given my finding of no agreement aforesaid, the unilateral insertion of the respondent’s HKID number does not add anything to the applicants’ case. In any event there was no space for a BRC number in the 2nd tenancy agreement even if the tenant was a limited company. Arguably, inserting a HKID number in the space provided can help identify the person signing on behalf of a limited company tenant. 36.By reasons of the above, this tribunal does not accept the 1st applicant’s evidence that there has been agreement prior to 22 April 2012 for the respondent to take up the 2nd tenancy personally. Further, this tribunal also finds that subsequent to 22 April 2012, there was no agreement to the same effect either. This tribunal believes, as testified by the respondent, that since the 1st applicant insisted not to include the old terms to the agreement, the respondent did not know how to deal with the situation. With a view to continue operate the business there, the respondent had no alternative but to sign for DIM on the 2nd tenancy agreement and return, hoping any problem that might pop up could be resolved later. It was only after the return of the 2nd tenancy agreement that the 1st applicant inserted the respondent’s name as tenant before stamping it. In the tribunal’s judgment, it will not make the respondent the tenant to the tenancy agreement. It is DIM who was tenant under the 2nd tenancy agreement. Conclusion and Orders 37.Since on a balance the respondent can established that when the 2nd tenancy agreement was made, it was DIM, not the respondent who signed as the tenant, it is a total defence to the applicants’ application. The application is hereby dismissed. 38.This tribunal would like to make it clear that the decision herein does not mean that this tribunal has come to a finding that the 2nd tenancy agreement carries with it the terms set out in the remarks of the 1st tenancy agreement. It remains a live issue between the applicants and DIM, though to a substantial extent the witnesses will be bound by what they have said in the present proceedings. 39.As regards costs, this tribunal fails to see why costs should not follow the event. Accordingly, this tribunal makes a costs nisi that the applicants do pay the respondent’s costs of the application on District Court scale, such costs be made absolute if no application is made to vary the costs nisi within 14 days from today. Upon making of the costs order absolute the respondent is at liberty to apply to this tribunal for the costs to be assessed by summary assessment.
The 1st applicant appeared in person and also being the representative of the 2nd applicant Ms Candy Fong, instructed by Wong & Co, for the respondent [1] According to the company search records exhibit R-3, the respondent resigned as director on 5 April 2013. Her mother, one Madam Chow Fung Yu has become the only director and shareholder of DIM now. [2] See §6 above [3] Her evidence before close of hearing on the 1st day of the trial. [4] Her evidence on the 2nd day of trial after tendering exhibit R-1 and R-2. [5] Seethe 1st applicant’s evidence at §16 above [6] See the Whatsapp conversation between them between 23 April and 1 May 2012 [7] See the Whatsapp message sent by the respondent on 25 April 2012 [8] See the 1st applicant’s Whatsapp messages between 25 April and 11 May 2012 [9] See the 1st applicant’s evidence towards the end of the 1st day trial. [10] See her evidence at cross examination on the 1st day of trial. [11] See Exhibit A-3 for date of stamping on 26 June 2012 and the Whatsapp messages on 22 and 24 June 2012 [12] This point was not disputed by the 1st applicant as her reply was that she expected it natural and reasonable for the respondent to send over a BRC copy of DIM to her for record. [13] See her Whatsapp message on 18 March 2014 at page 20 of the Whatsapp bundle [14] See the Whatsapp messages on 14 March 2014 at page 19 of the Whatsapp bundle |
Further hearings and rulings under LDPE 523/2014