Documente Academic
Documente Profesional
Documente Cultură
DCCJ 1347/2008
B B
IN THE DISTRICT COURT OF THE
C C
HONG KONG SPECIAL ADMINISTRATIVE REGION
E E
F BETWEEN F
G G
TSANG YUEN MUI Plaintiff
H and H
J J
N JUDGMENT N
O O
P 1. The Plaintiff, Tsang Yuen Mui (“Madam Tsang”) was a tenant of the P
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B 2. The Defendant Madam Choi Sim Ching (“Madam Choi”) is and was the B
2007, the Plaintiff and the Defendant negotiated the renewal of the tenancy
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and the Plaintiff began to pay an increased monthly rental of $9,800 from
J 1 April 2007. J
K K
4. In the present proceedings, the Plaintiff claims against the Defendant for
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the return of the rental deposit of HK$17,600. The Defendant, on the other
M
hand, counterclaims for:- M
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(i) The sum of $9,800 as one month’s rental in lieu of
O
notice to quit; O
P P
(ii) The sum of $9,969.43 including outstanding rental,
Q
management fee, government rates and air-conditioning Q
fee on a pro rata basis from 1 October to 25 October
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2007;
S S
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(iii) The sum of $91,300 incurred by the Defendant,
B including estimated cost for repair, reinstatement, B
E E
5. According to the evidence of Lee Yiu Fai, the ex-husband and business
F partner of the Plaintiff, Madam Tsang Yuen Mui, the Plaintiff was the F
tenant of all four premises located on the ground floor of Waldorf Garden
G G
Shopping Arcade in Tuen Mun, namely shops 6, 15 and 16-17 between
H 1 April 2004 to 31 March 2007. Shop 15 (“the suit premises”) is and was H
owned by the Defendant Madam Choi, who signed a written 3 year tenancy
I I
agreement with Madam Choi for the said period. The Plaintiff paid to the
J Defendant two months rental as rental deposit for the tenancy amounting to J
K
$17,600. Under Clause 7 of the tenancy agreement, upon delivery of K
vacant possession, the landlord would return the rental deposit to the
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tenant. On this basis, the Plaintiff claims for the return of the said deposit.
M M
6. Mr Lee claimed that in or about mid-March 2007, Madam Choi
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approached him to discuss the renewal of tenancy asking for an increase in
O
rental at $9,800 a month after the expiry of the existing lease. Mr Lee O
claimed that Madam Choi’s offer was not acceptable to him and Madam
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Tsang. On behalf of Madam Tsang, he entered into an oral agreement with
Q
Madam Choi to extend the tenancy for a short period. The terms of the oral Q
agreement were:-
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(b) Between 1 April and 30 September 2007, the monthly
B rental of the suit premises would be $9,800; B
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(c) The Plaintiff would repair the air-condition unit
D installed in the suit premises; D
E E
(d) The Plaintiff shall reinstate the suit premises pursuant to
F clauses 17 and 18 of the tenancy agreement before F
I I
7. Mr Lee claimed that the reason for refusing to renew the tenancy of the
J suit premises for a term of three years was the increased monthly rental to J
K
$9,800 demanded by the landlord. He claimed that Madam Choi did not K
require Madam Tsang to pay an extra $2,000 for the increase rental deposit
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and the parties did not discuss the execution of a new written tenancy
M
agreement. Madam Tsang began paying the monthly rental of $9,800 in M
April 2007 to Madam Choi.
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O
8. In or about August 2007, the Plaintiff and Mr Lee’s restaurant engaged O
the services of a contractor Leung Kee Water & Electrical Engineering
P P
Company (“Leung Kee”) to carry out renovation works at shops 6, 16 and
Q
17. Mr Lee claimed that neither Madam Tsang nor the contractor Leung Q
Kee destroyed the interior of the suit premises. He claimed the work
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conducted at the suit premises was pursuant to the terms of the tenancy
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9. Mr Lee further claimed that on a day shortly before 30 September 2007
B while the renovation work was underway, Madam Choi and her husband B
attended the suit premises. She requested Madam Tsang to carry out
C C
certain extra works, including the demolition and removal of sundry items
D at the suit premises and all the tiles affixed on the wall. Mr Lee turned D
2007, requesting her to repossess the suit premises, but the request was
G G
rejected by Madam Choi because some of the floor tiles had not been
H removed. Mr Lee admitted that because of Madam Choi’s unreasonable H
J 11.In early October 2007, Mr Lee had a discussion with Madam Choi and J
K
her husband when they visited the suit premises. They came to an K
agreement in respect of the delivery of possession of the suit premises (“the
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second oral agreement”). The terms of the second oral agreement were:
M M
(a) The Plaintiff would pay the cost of demolishing the tiles
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affixed to the floor of the suit premises;
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(b) Immediately upon the conclusion of the second oral
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agreement, the Defendant would take possession of the
Q
premises; and Q
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(c) The Defendant would return the rental deposit of
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12.Mr Lee said, he had returned the set of keys in triplicate to Madam Choi
B on the same day. Madam Choi in turn gave one set of keys to one of the B
decoration workers of Leung Kee and instructed him to demolish the floor
C C
tiles at the suit premises and payment would be settled by Madam Tsang or
D Mr Lee. Mr Lee also claimed that Madam Choi had given one set of keys D
wrongly redirected the water meter and the 3-phase electricity supply
I I
system at the suit premises. The Plaintiff claimed the drainage system, the
J stove, water pipes and electricity system located at the premises did not J
K
belong to the Defendant because they were installed at the suit premises by K
the Plaintiff during the tenancy for the operation of the restaurant. That the
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drainage system, water pipes, electricity system installed at the suit
M
premises were the extension from the Plaintiff’s restaurant and the stove M
was installed by the Plaintiff when the suit premises was used as the
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restaurant’s kitchen.
O O
14.Mr Lee claimed the electricity supply at the suit premises was controlled
P P
by a central electricity panel at the Waldorf Garden Shopping Arcade
Q
where the electricity meters for all the shops at the Arcade are located. The Q
central electricity panel is under the care and control of the management
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office of the Waldorf Garden. Mr Lee admitted that originally, each of
S shops 6, 15, 16-17 had an electricity switch box at their respective premises S
with electricity supplied from the central electricity panel. When the
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restaurant was operating at shops 6, 15, 16-17, the electricity supplied by
B the China Light & Power (“CLP”) was registered under a single account. B
C C
15.Mr Lee claimed that before the restaurant commenced business in
D August 1997, the restaurant had applied to Guardian Property and CLP for D
a 3-phase electricity supply to the restaurant which was duly approved and
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registered under shop 6. At the time, the CLP had installed an extra
F electricity cable for which the Plaintiff had to pay an additional deposit to F
CLP and Guardian Property, the deposit the Plaintiff paid to CLP was
G G
HK$29,000 while the deposit to Guardian Property was $4,000. The
H Plaintiff therefore claimed that Madam Choi is not entitled to the deposit of H
$4,600 because Madam Choi did not pay the deposit for shop 15 to the
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CLP.
J J
K
16.Mr Lee further claimed that in or about August 1997 before the K
restaurant commenced business, the Plaintiff applied to Guardian Property
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for the installation of the drainage system as the tenant of shop 6. It was
M
approved by Guardian Property and a deposit to Guardian Property of M
$4,000 was paid by the Plaintiff. He insisted that throughout the operation
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of the restaurant, the four units shared one single drainage system, and
O
when the Plaintiff delivered vacant possession to Madam Choi, the Plaintiff O
had reinstated the suit premises to its original condition.
P P
Q
17.On the central air conditioning supply, Mr Lee denied the Plaintiff had Q
destroyed the air conditioning unit at shop 15. He claimed that the Plaintiff
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had complied with clause 17 of the tenancy agreement and repaired the air
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18.Mr Lee further alleged that when the Plaintiff and he took over the
B restaurant from its former owner「東瀛居」, they had bought the right to B
use the drainage system installed by the former owner. Consequently, they
C C
were entitled to block the drains outlet at the suit premises before the
D Plaintiff delivered vacant possession to Madam Choi. He further claimed D
E
that he had reinstated the suit premises when he delivered vacant E
possession to Madam Choi in accordance with the tenancy agreement.
F F
G
The Defendant’s Case G
H H
19.It is the evidence of Madam Choi that she bought the suit premises in
I
1983 where she operated a stationery and gift shop with her husband. I
Because of the power requirement for spot lights installed at the shop, she
J J
had obtained approval from China Light & Power to increase the electricity
K
supply to 3-phase power loading. In 1991, Madam Choi and her husband K
closed the stationery and gift shop and let out the suit premises. Prior to
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1998, the suit premises was let out to a hairdresser. Between 1 April 1998
M to 31 March 2001, the suit premises was let to a Mr Leung Wing Cheung as M
one of four units used as a Japanese restaurant 「東瀛居」. Mr Leung and
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his brother Mr Leung Kin Shing had operated a karaoke bar at shops 6, 16
O and 17 before they took out the lease on the suit premises on 1 April 1998. O
At the time, Mr Leung informed Madam Choi they would install a kitchen
P P
at the suit premises and they would install and connect the drainage and
Q water pipes at the suit premises that the drains at the restaurant would be Q
switch box and meter of the suit premises. Madam Choi said that was why
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she had specified in clause 18 of the tenancy agreement that on the expiry
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of the tenancy, the tenant would be required to reinstate the partition wall,
B the glass partition and the original electricity switch box and meter. B
C C
20.On 18 January 1999, Mr Leung transferred the restaurant「東瀛居」to
D a new owner named Mr Hou Sze Heng who operated the restaurant under D
E
the name of 「秋田日本料理」(Akita Japanese Restaurant). Madam Choi E
was only informed of the transfer in March 1999 and Mr Hou agreed to
F F
take over the existing lease Mr Leung had signed with Madam Choi and Mr
G
Hou accepted the same conditions and terms of the 1998 tenancy G
agreement. Upon expiry of the lease on 31 March 2001, Mr Hou renewed
H H
the tenancy for a further three years up to 31 March 2004 at the same rent
I of $8,800 per month. Madam Tsang, the Plaintiff, was a witness to the 1 I
April 2001 tenancy agreement. Madam Choi was given to understand that
J J
Madam Tsang and Mr Hou were business partners. Madam Choi claimed
K she had reminded Mr Hou Sze Heng that he was required to reinstate the K
suit premises as agreed under the previous tenancy agreement on the expiry
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of the new lease and Mr Hou agreed, consequently, to the inclusion of
M clauses 17 and 18 in the 1 April 2001 tenancy agreement. She claimed that M
the same terms requiring Mr Leung in the previous agreement applied to
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Mr Hou under the new tenancy agreement including the reinstatement of
O the partition wall, the glass partition, the 3-phase electricity switch box and O
the requirement that the drainage system should not be removed.
P P
Q Q
21.It was Madam Choi’s evidence that when the lease expired on 31 March
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2004, she agreed to renew the lease with Madam Tsang for a period of
S three years on the same terms and conditions as in the previous leases with S
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economy caused by SARS in 2003. Madam Choi claimed that Madam
B Tsang just as Mr Leung and Mr Hou before her, had agreed to the same B
conditions to reinstate the partition wall, the glass partition, the 3-phase
C C
electricity switch box and the retention of the drainage system.
D D
K
the same and the renewed term of tenancy was for three years from 1 April K
2007 to 31 March 2010. According to Madam Choi, Madam Tsang should
L L
have paid a further $2,000 as rental deposit to make up the difference due
M
to the increase of rental. She did not ask for it because when the monthly M
rental was reduced by $800 in 2004, she had retained the extra $1,600 on
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the deposit as she had intended to increase the rental when the market
O
recovered, for that reason, she did not ask for the extra $2,000 on the O
increased rental deposit in 2007.
P P
Q
23.Madam Choi claimed that in May 2007, she visited the suit premises Q
intending to sign a written tenancy agreement with Madam Tsang. On that
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occasion, Madam Tsang told her she was busy and she would sign the
S agreement later when she was less busy. Unfortunately, Madam Tsang S
never contacted her for the purpose and failed to call her back whenever
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she called. As Madam Tsang had been paying the rental on time and as she
B was a long term tenant, Madam Choi did not insist. B
C C
24.Madam Choi visited the Plaintiff’s restaurant on 4 September 2007 to
D collect the September rental, she forgot to bring with her the rental receipt, D
Madam Tsang told her at the time to bring the receipt when she came to
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collect the October rental. However, on 25 September 2007 when she
F passed by the Plaintiff’s restaurant, she found the restaurant had ceased F
K
and told Mr Lee that Madam Tsang should give her prior notice. K
L L
25.On or about 27 or 28 September 2007, Madam Choi visited the suit
M
premises again to find the interior of the shop partly demolished with a big M
hole on the floor closed to the entrance, the glass partition facing the street
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was cracked, the wall tiles were broken and partly demolished, one of the
O
two air conditioning fan coil units was taken down and left on the floor, the O
second one was missing and the drainage outlet blocked with cement. She
P P
informed Mr Lee at the shop next door that he had to reinstate the suit
Q
premises before delivery of vacant possession, otherwise, she would retain Q
the rental deposit. Mr Lee agreed to her request. On 30 September 2007,
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Mr Lee telephoned her to inform her that Madam Tsang was ready to
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she found all electricity wiring and the electricity switch box had been
B removed and the drainage outlet blocked. She refused to take possession of B
the suit premises and contacted Madam Tsang informing her that the suit
C C
premises had to be reinstated.
D D
26.On 6 October 2007, Madam Choi visited the suit premises intending to
E E
recover possession. She discovered that although the partitions had been
F restored, there was no electricity switch box or wiring at the suit premises, F
and the drainage outlet was still blocked. She again requested Madam
G G
Tsang to unblock the drainage outlet and restored the original electricity
H supply at the suit premises. However, Madam Tsang claimed she had H
K
electricity switch box at the suit premises. Madam Choi found the K
Plaintiff’s restaurant continued to operate at shops 6, 16 and 17 of the
L L
Waldorf Garden Shopping Arcade. She claimed the restaurant had taken
M
over the 3-phase power supply from the suit premises and transferred it to M
the Plaintiff’s restaurant. Madam Choi further claimed that the drainage
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outlet at the suit premises was blocked because Madam Tsang had
O
relocated the restaurant’s kitchen drains to shops 6, 16 and 17. Madam O
Choi counterclaims against Madam Tsang for failure to reinstate the suit
P P
premises under the tenancy agreement and that the rental deposit should be
Q
set off against the costs of reinstatement. Q
R R
28.Madam Choi claimed that she had to pay for the reinstatement herself
S which included the two central air-condition fan coil units, because when S
the suit premises was handed over to Madam Choi, only one air
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conditioning fan coil unit remained, the other had disappeared. The
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remaining one did not work and was coated in grease. Clause 17 of the
B tenancy agreement stipulated that the tenant was responsible for the repair B
E E
29.Madam Choi had to engage contractors to open up the floor at the
F entrance area of the suit premises to look for and unblock the drains outlet F
which was connected to the building’s main drainage outlet. It took her
G G
contractor two attempts before it was found.
H H
J 30.Madam Choi claimed that because the Plaintiff had failed to reconnect J
K
the electricity supply, she had to instruct Leung Kee to reconnect the K
electricity supply and installed a meter for the suit premises. The work was
L L
completed on 25 October 2007. Madam Choi claimed that because of the
M
work involved to reinstate the suit premises, Leung Kee completed the M
work and delivered four sets of new keys to her on 31 December 2007.
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O O
P P
Q Q
Wall Tiles and Wall Plaster
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S 31.Because the Plaintiff failed to remove the broken wall tiles, Madam S
Choi had to instruct Leung Kee to remove the wall tiles and replaster the
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wall at her own expense.
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C C
32.Madam Choi found the Plaintiff had removed all the drains and
D plumbings at the said property, she had obtained a quotation for the D
F 33.As soon as the reinstatement work was completed, Madam Choi had put F
up the suit premises for rental but it was not until April 2010 that she was
G G
able to let it out as a warehouse to 「日昌發展有限公司」 at a monthly
H H
rental of $12,500 for a period of 2 years, inclusive of rates, management
I
fees and air conditioning charges. I
J J
Issues of dispute
K K
34.The parties have agreed the issues of dispute as follows:-
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O O
(2) Whether there was an oral agreement made in or about
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February and March 2007 between the Plaintiff and the
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(3) Whether the Defendant was entitled to deduct the
B amount equivalent to one month’s deposit in the sum of B
F 2007? F
$9,969.43?
J J
K
(6) Whether the premises should be reinstated, if so, K
whether the following items should be included?
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Q Q
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oral agreement? Has the Plaintiff discharged her duty
B under the second oral agreement? B
C C
Findings
D (1)&(2) Whether there was an oral tenancy agreement in mid March 2007 D
between Mr Lee Yiu Fai and the Defendant for 6 months as alleged by the
E E
Plaintiff? Or whether there was an oral agreement in or about February or
F March 2007 for the renewal of the first written tenancy agreement for 3 F
years; if so, whether the terms of the first written tenancy agreement
G G
applied to the extension period?
H H
K K
“6. Creation of interest in land by parol
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(1) All interests in land created by parol and not put in writing
and signed by the persons creating the same, or by their
M agents thereunto lawfully authorized in writing, have, M
notwithstanding any consideration having been given for
the same, the force and effect of interests at will only.
N N
(2) Nothing in section 3 or 5 or in subsection (1) shall affect
O the creation by parol of leases taking effect in possession O
for a term not exceeding 3 years (whether or not the lessee
is given power to extend the term) at the best rent which
P can be reasonably obtained without a premium.” P
Q 36.Mr Chan, counsel for the Defendant, informed the Court at the hearing Q
R
that the Defendant is no longer seeking the enforcement of the 3 year oral R
tenancy agreement. On that basis, this Court would only be required to
S S
determine whether the parties had agreed to a renewal of the lease for 6
T
months or for 3 years and its consequences. T
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when Madam Choi would come for the rent in October 2007. I do not
I I
believe Madam Choi had made up that conversation on the rent receipt with
J Madam Tsang. It has a ring of truth. J
K K
38.I accept Madam Choi did not receive any prior notice from Madam
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Tsang or Mr Lee until 25 September 2007 when Madam Choi passed by
M
the suit premises and found demolition work underway at the suit premises. M
It was when she came across Mr Lee coming out of the restaurant premises
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that she was informed for the first time that the Plaintiff would be handing
O
over the suit premises to Madam Choi at the end of September 2007. O
P P
39.I accept Madam Choi’s evidence that when she and Madam Tsang
Q
discussed about the renewal of the lease of the suit premises in or about Q
February and March 2007, Madam Choi had proposed an increase of rental
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to $9,800 per month for a period of 3 years up to 31 March 2010, Madam
S Tsang and her partner Mr Lee were reluctant to pay the increased rental but S
they had little choice when the lease was due to expire in March 2007 and
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Madam Choi stood her ground. However, as neither party had put the oral
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agreement in writing and neither party had insisted on an immediate
B signing of a written tenancy agreement, Madam Choi had allowed Madam B
Tsang to drag the matter on. I am not convinced the first oral agreement
C C
alleged by the Plaintiff was reached and consented to by Madam Choi. I
D accept Madam Choi did request Madam Tsang to sign a written 3 years D
tenancy agreement from time to time, but it was clear Madam Tsang and
E E
Mr Lee were reluctant to do so. Consequently, the existing tenancy was
F allowed to hold over and carry on as a tenancy at will. As rental was paid F
J (3) Whether the Defendant was entitled to deduct the amount equivalent J
K
to one month’s deposit in the sum of $9,800 pursuant to clause 1 of the first K
written tenancy agreement
L L
M
40.According to Madam Choi’s evidence, she was only informed by Mr M
Lee on 25 September 2007 that Madam Tsang would no longer be renting
N N
the suit premises in October 2007 and that Mr Lee and Madam Tsang both
O
admitted no formal notice to quit orally or in writing was given to Madam O
Choi. Under the law, for a month to month tenancy, the tenant is required
P P
to give one month notice to quit. If the tenant failed to give sufficient
Q
notice, then the tenant must pay the landlord rental in lieu of notice. In this Q
case, the notice being one month, the tenant is required to pay the landlord
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one month rental in lieu of notice. Because the same terms of the first
S written tenancy agreement applies to the held over tenancy, clause 1 of the S
said tenancy agreement is binding on the tenant. Therefore Madam Choi is
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entitled to deduct one month rental from the rental deposit under clause 1
B as payment in lieu of notice. B
C C
Issues 4 and 7
D (4) The date of delivery of vacant possession of the suit premises: was it D
F (7) Whether there was a second oral agreement made on 6 October 2007? F
If so, what are the terms of the second oral agreement? Has the Plaintiff
G G
discharged her duty under the second oral agreement?
H H
41.It is the Plaintiff’s witnesses’ evidence that vacant possession of the suit
I I
premises was delivered on 30 September 2007, this was disputed by
J Madam Choi. While Mr Lee claimed that he had requested Madam Choi to J
K
accept delivery of vacant possession of the suit premises on 30 September K
2007, Madam Choi did not attend the premises claiming it was late at night
L L
and she was concerned for her safety. Madam Choi did not visit the
M
premises until 6 October 2007 when Mr Lee returned a set of keys M
belonging to the suit premises to her. Madam Choi however denied the
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said premises was ready for repossession because it was full of rubbish and
O
kitchen equipments belonging to the Plaintiff’s restaurant. O
P P
42.Mr Lee claimed that there was a second oral agreement reached on that
Q
occasion between himself and Madam Choi on the reinstatement of the suit Q
premises. Madam Choi denied there was any such oral agreement. She
R R
claimed she had required Madam Tsang and Mr Lee to remove the
S remaining tiles on the floor because the suit premises was full of rubbish S
with the floor partially covered in tiles, she therefore refused to take
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repossession. She produced photographs taken in October 2007 showing
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various stages of repair at the suit premises during that month. Mr Lee,
B under cross examination, admitted that a cooking pot in photo 12 (on page B
(2) erect a new glass wall and glass door (at the entrance of
I I
the suit premises leading to the shopping arcade);
J (3) remove all sundries at the ceiling of the suit premises; J
K
(4) remove the tiles on the wall of the suit premises; K
(5) erect a new electricity switch box and install two sets of
L L
lights at the suit premises;
M
(6) remove all articles and materials at the suit premises. M
N N
44.It is obvious the work was not completed on or before 30 September
O
2007 and that some of the work was still not done by 6 October 2007 when O
Madam Choi visited the suit premises. She had demanded Madam Tsang
P P
and Mr Lee to reinstate the premises in accordance with the tenancy
Q
agreement on that occasion, in particular, the supply of electricity, water Q
and air conditioning at the suit premises. On 25 October, she brought with
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her a copy of her ID card intending to register with the building
S management for the electricity and water meter in her name. However, she S
found only the partitions were restored but no electricity cable or switch
T T
box installed and the drainage outlet was still blocked, she then requested
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Madam Tsang to unblock the drainage outlet and restore the electricity and
B water supply to the suit premises. Madam Tsang refused and they had a B
D 45.I have carefully assessed the evidence of both the Plaintiff’s and the D
K
units were removed from the ceiling, the drains outlet blocked and the K
plumbings had disappeared from the suit premises. Meanwhile, Madam
L L
Choi insisted that Madam Tsang should reinstate the suit premises in
M
accordance with the terms and conditions of the tenancy agreement, but M
Madam Tsang and Mr Lee completely ignored her requests. As the matter
N N
dragged on, the reinstatement work at the suit premises was delayed. On
O
the Plaintiff’s alleged second oral agreement, the tenant is bound by the O
covenant to repair under the terms of the tenancy agreement, should it be
P P
complied with the landlord has to return the deposit under the agreement.
Q
There was no need for the parties to reach the second oral agreement Q
because they were both bound to comply with the terms of the tenancy
R R
agreement. I therefore, conclude there was no second oral agreement save
S that the Plaintiff had agreed to reinstate the suit premises under clauses 13, S
14, 17 and 18 of the tenancy agreement.
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(5) Whether the Defendant is entitled to claim rent or mense profit,
B management fee, government rent and rates, and air conditioning fee for B
the period between 1 October 2007 and 25 October 2007 in the total sum of
C C
$9,969.43
D D
46.Based on the aforesaid findings, the Defendant did suffer loss and
E E
damages as a result of the Plaintiff’s failure to deliver vacant possession
F under the terms and conditions of the tenancy agreement. I allow the F
I I
(6) Whether the suit premises should be reinstated, if so, whether the
J following items should be included: J
K
Reinstatement or repair of: K
(a) the drainage system;
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(b) the walls;
M
(c) the water pipes; M
(d) electricity wiring;
N N
(e) the raised floor; and
O
(f) the air conditioning units. O
P P
47.I find Madam Choi’s request for reinstatement under the tenancy
Q
agreement to be entirely reasonable. It was a condition of the tenancy Q
agreement under clauses 17 and 18 that the tenant should reinstate the
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partition wall, the glass partition and glass door as well as the plumbing
S and electricity wiring and meter and maintain the air conditioning units. So S
far as the drainage outlet is concerned, I accept Madam Choi’s evidence
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that it was installed by the tenant who operated a hairdresser at the
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premises before the suit premises was let to Mr Leung as part of a
B restaurant. Mr Leung had installed and extended the drainage system B
leading to the drainage outlet at the suit premises. Consequently, the tenant
C C
who took over the tenancy after Mr Leung had in subsequent tenancy
D agreements accepted the reinstatement and the restoration of the suit D
premises in a state it was in when the restaurant took over those premises
E E
under clauses 10, 13, 14, 17 and 18 of the tenancy agreement. Even though
F clauses 10, 13 and 14 were standard terms on a printed tenancy agreement F
form, Madam Choi did remind her tenants of those terms and the additional
G G
clauses 17 and 18 each time the tenancies were renewed. Clauses 10, 13,
H 14, 17 and 18 stated:- H
I I
“(10) 該樓一切門窗,廚房及浴室之設備,如潔具,水喉,
J
水渠等如有損壞,租客須負責修理或賠償。如租客因 J
疏忽而毀壞本樓之設備,損及別人之傢具衣物或傷害
其他人等,租客須負責賠償。租客須自投風災,水,
K 火,盜竊及意外保險,租客如有任何損失,業主不負 K
任何責任。……
L L
(13) 租客搬進該樓宇時,裝修入牆間格窗花等,遷出時不
得拆回以維持該樓原有之齊整。如得業主同意,租客
M 方可拆回但必須將該樓完整修理。該樓宇內之電器設 M
備包括/部熱水爐,/部冷氣機,水電分錶各一個,
N
租客退租時,須要完整地交回業主。如租客故意損壞 N
該等設備可被控告惡意破壞物品罪並須負責賠償。
O (14) 該樓宇之電錶及水錶均屬業主名下登記,業主負責保 O
養及維修水電錶。租客依照水電分錶耗量付款,如租
客欠租超過十五天,或多次催促而仍未繳交水電費或
P P
管理費等,業主有權拒絕供應食水及電力給租客。 …
…
Q Q
(17) 雙方協議:舖內之中央冷氣於交舖時,租客必須負責
維修。
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48.As to the extent and the cost of reinstatement, a number of authorities
B have been referred to me by the Plaintiff’s counsel, Ms Yung, on the right B
of the tenant to remove the tenant’s fixtures from the demised premises. In
C C
the English Court of Appeal case of New Zealand Government Property
D Corporation v. H.M. & S. Limited [1982] 2 Weekly Report 837, the tenant D
by negotiations on the new lease. A new lease for a term of 21 years from
G G
1 October 1970 was executed at the rate of £25,000 per annum for the first
H seven years with the next seven years at open market rental. The parties H
I
disagreed on the appropriate rental for the second seven years. The dispute I
was referred to arbitration. On appeal by the tenant, Woolf J. held that the
J J
rent was to be fixed on the basis that the tenant had removed all tenant’s
K
fixtures annexed to the premises during the terms of the old or new leases. K
The Court of Appeal dismissed the appeal by the landlord and held that the
L L
tenant had the right to remove the tenant’s fixtures from demised premises
M
so long as he was in possession as a tenant. M
N N
49.The New Zealand Government Property Corporation case was decided
O
based on very different background where the tenant had a long lease and O
had installed the equipments for a theatre at the leased property. The case
P P
was on assessment of rental. In the present case, under the tenancy
Q agreement, the landlord had stipulated a covenant of repair which the tenant Q
had to comply with. Clause 13 of the tenancy agreement stipulated that the
R R
tenant shall not remove the existing decoration, fixtures and windows when
S the tenant delivers vacant possession on expiry of the lease. Under clauses S
17 and 18, the tenant was required to maintain the air conditioning units
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and to reinstate the wall partitions, the glass wall and the electricity switch
B box. B
C C
50.In paragraph 235.303 at page 291 of the Halsbury’s Laws of Hong Kong
D Vol. 17(1) (2007 re-issue), the author stated: D
E E
“[235.303] Covenant construed with reference to original
condition of premises. Every covenant to repair must be
F F
construed primarily according to the words used, but having regard
to the age and nature of the premises at the commencement of the
G lease. In the case, however, of a covenant by the tenant for general G
repair, such as a covenant to repair the demised premises and to
yield them up in good and substantial repair and condition, or to
H keep and leave them in good and tenantable order and repair, the H
particular form of words used is immaterial so long as it plainly
I
expresses the intention that the premises are to be repaired, kept in I
repair and yielded up in repair. In each case the obligation upon
the tenant is to keep and deliver up the premises he has taken in a
J state of repair proper for such premises; and the tenant may, J
therefore, be liable to put the premises into a better condition than
they were in at the time of the letting.”
K K
P occupation by a tenant who would have been likely to occupy it at the time P
of the demise even though the landlord may be expected to carry out minor
Q Q
redecorations before the start of every new letting.
R R
52.The standard of repair according to the author of Halsbury’s Laws of
S S
Hong Kong Vol. 17(1) at page 298 is:
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“[235.309] Standard of repair. If he has expressly covenanted to
put a house into tenantable repair and to keep it in such repair, and
B it is not in tenantable repair at the commencement of the tenancy, B
the tenant must do the necessary repairs, notwithstanding that the
C building is thereby put in a better condition than when the landlord C
let it. The effect is the same if, without expressly covenanting to
put it into repair, the tenant covenants only to keep the house in
D tenantable repair. Such a covenant presupposes putting the house D
in such repair, and keeping it in repair during the term. The
construction of the covenant is the same whether the covenant
E E
specifies ‘tenantable’ or ‘habitable’ or ‘good’ repair. A general
covenant to repair without any such words is satisfied if the
F premises are kept in a substantial state of repair ….. F
K K
53.On the subject matter of repair, the author of Halsbury’s Laws of Hong
L Kong Vol. 17(1) paragraph 235.304, said: L
M M
“[235.304] Subject matter of repair. What is to be repaired must
be gathered from the terms of the covenant. Generally the
N obligation expressed will be to repair the premises demised which N
will include any fixtures present at the time of leasing. A covenant
that a tenant shall be ‘solely responsible for the repair of doors,
O O
windows, kitchen and bathroom fittings, pipings, drains, etc’ is
not a covenant to repair the whole premises, is vague and uncertain
P and should be construed strictly against the landlord. P
R R
Tat Ming Trading Co Ltd v Alpino Ltd, (unreported; HCA
1659 of 2004); Lai Kin On Jacky v Sajjad-Haider t/a New
S Kashmir Restaurant (unreported; DCCJ 5148 of 2004). S
Accordingly this covenant does not cover structural defects
T
nor repair of a ceiling or a floor as a result of water T
seepage.”
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C C
54.I accept the drains outlet connected to the main drains of Wardorf
D Shopping Arcade from the said premises was first installed by the D
hairdresser tenant for the tenant’s use at the time. The Plaintiff admitted
E E
the four shops shared one single drainage system at the time when the
F restaurant occupied shops 6, 15, 16 and 17. The drainage system was F
drains outlet at the suit premises for the restaurant had installed a separate
I I
drainage system in 1997 when it operated a bar and karaoke at shops 6, 16
J and 17. The two drainage systems had existed side by side before the J
K
restaurant took over the suit premises and made used of the drains outlet. K
The act reflected the cavalier attitude of the Plaintiff in respect of the
L L
reinstatement work. As a result, the Defendant had great difficulties in
M
finding the exact location of the drains outlet at the suit premises. It took a M
number of attempts by the contractor to locate where the drains outlet was
N N
and breaking the floor slab which had been raised by the Plaintiff to cover
O
the drainage system at the said premises when it was used as a kitchen. O
P P
55.When Madam Tsang and her partner Mr Lee took over the tenancy from
Q
the former tenant Mr Hou and operated the restaurant at the same four Q
shops, not only did she take over the fixtures at the suit premises, she also
R R
inherited the liability of the former tenant. Madam Choi’s evidence was
S she had painstakingly reminded Mr Leung when he and his brother first S
operated a Japanese restaurant at the suit premises on 1 April 1998 that the
T T
tenant should not remove the plumbings, drains and the outlet on delivery
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of vacant possession at the end of the lease. In March 1999 when Mr
B Leung informed Madam Choi that Mr Hou would take over the restaurant B
and the lease of the suit premises, Mr Hou had agreed to take over the
C C
responsibility of all the existing conditions and terms under the tenancy
D agreement. When the lease was renewed on 1 April 2001 for a period of D
three years, Madam Choi again reminded Mr Hou of the terms and
E E
conditions to reinstate the electricity supply mains, the partition walls etc,
F consequently, clauses 17 and 18 were included in the 1 April 2001 tenancy F
on 1 April 2004 from Mr Hou, she, as his partner and the witness to the
I I
previous 2001 to 2004 lease, must have knowledge of the conditions laid
J down by the landlord for the new lease from 1 April 2004 to 31 March J
K
2007. Furthermore, clauses 17 and 18 were again added to the first tenancy K
agreement between Madam Tsang and Madam Choi.
L L
M
56.I refer to the dictum of Sakhrani J. in the case of Timeless Software M
Limited v Glorious Limited (unreported; HCA 151 of 2007) at paragraph 97
N N
where he held:
O O
“The natural expectation in the absence of an express contrary
P
intention is that the tenant is obliged to reinstate premises to their P
state as at the beginning of the tenancy.”
Q Q
57.Sakhrani J. further referred to paragraph 235.125 of Vol. 17(1) of
R Halsbury’s Laws of Hong Kong at paragraph 67 of his judgement where he R
held:
S S
T “I accept that fixtures which the tenant may not remove are usually T
referred to as ‘landlord’s fixture’ and includes fixtures attached to
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the premises at the date of the tenancy, those fixed by the landlord
during the term and also those fixed by the tenant which he is not
B entitled to remove.” B
C C
58.I find therefore the Defendant is entitled to recover the cost of
D reinstating the drainage system and the cost of locating the drains outlet. D
However, since Madam Choi’s present tenant is using the suit premises as a
E E
warehouse, there is no urgent need for the drainage system to be reinstated,
F but the costs of locating and unblocking the drains outlet had been incurred, F
H Raised floor H
I I
59.It is Mr Lee’s evidence that he had agreed to Madam Choi’s request for
J the raised floor to be removed and he had arranged with Leung Kee that the J
Plaintiff would pay for the removal cost. Consequently, this item should be
K K
allowed.
L L
N 60.The state of the suit premises at the end of September 2007 was such N
that only part of the tiles were removed rendering the walls at the suit
O O
premises unsightly and uninhabitable. Mr Lee admitted in his evidence
P that removal of the remaining tiles was part of the second oral agreement P
why was it repeated in the “second oral agreement”? This clearly showed
S S
the Plaintiff accepted the tiles should be removed and the walls at the suit
T T
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premises should be made good rendering the suit premises to be tenantable
B as early as August 2007. B
C C
Electricity wiring
D D
61.Madam Choi had specified in each and every one of her written tenancy
E E
agreements the reinstatement of the electricity switch box at the suit
F premises under clause 18 of the agreement. It is clear that at the time of her F
visits at the end of September and 6 October 2007, the electricity cabling
G G
connection to the mains was not reinstated to the original state. The
H Defendant is entitled to have it reinstated. Correspondences with the H
Waldorf Garden Management Office showed shop 15’s power supply was
I I
increased from 30 Amp to 60 Amp in July 1988 (p. 77, pp. 88-101 of the
J bundle), not the 100 Amp 3-phase system which was installed by the J
K
restaurant in 1997 at shop 6. The reinstatement at the suit premises K
therefore should be to a 60 Amp power supply.
L L
M
The air conditioning units M
N N
62.Under the tenancy agreement, clause 17 stipulated that the tenant was
O
responsible for the maintenance and repair of the units. I accept Madam O
Choi’s evidence that one of the two fan coil units at the suit premises had
P P
disappeared and the other one was placed on the floor at the time of
Q
handing over. The Plaintiff was clearly in breach of the tenancy agreement. Q
I allow this item of claim by the Defendant.
R R
S Conclusion S
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63.I accept that the suit premises on 30 September 2007 was not ready to
B be handed over to the landlord until 25 October 2007, I therefore allow the B
following:-
C C
premises
K K
(9) Cost of reinstating water pipes $25,000.00
(10) Cost of replacement of the air conditioning unit $5,000.00
L L
64.I adopt the report of the jointly appointed expert John Yip Surveyors
M M
Limited for his assessment of costs on reinstatement. The total
N reinstatement costs allowed is $68,258.55. N
O O
P P
Set off
Q Q
R 65.The Defendant is allowed to set off the rental deposit of $17,600 from R
the costs of repair. Consequently, the Plaintiff has to pay to the Defendant
S S
under the counterclaim in the sum of $50,658.55.
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Interest
B B
E E
Cost
F F
67.Costs to follow the event. The Plaintiff shall pay the Defendant costs on
G G
the counterclaim, to be taxed if not agreed with certificate for counsel.
H H
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J J
(H C Wong)
K
District Court Judge K
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Miss Eunice Yung instructed by Messrs. Eric Yu & Co. for the Plaintiff
M M
Mr. David Chan instructed by Messrs. Wong, Kwan & Co. for the
N Defendant N
O O
P P
Q Q
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S S
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