Landlord and Tenant - Subletting in breach of the provision of the tenancy agreement - Landlord's messenger sent to collect rent on a single occasion was a rent collector simpliciter and not the landlord's agent - Endorsement on the cheque given to the messenger to the effect that the premises had been sublet could not be regarded as notice to him and thereby to the landlord - Demand by landlord of accrued rent after having knowledge of subletting does not amount to waiver of right of forfeiture - Order of possession against tenant for subletting in breach of contractual tenancy also operates as an order for possession against the sub-tenant.
IN THE DISTRICT COURT OF HONG KONG
HOLDEN AT VICTORIA
ACTION NO 1191 of 1980
|HIN FAT INVESTMENT COMPANY LIMITED
|TAIPAN AGENCIES CORPORATION
|MARTIN AND VOORHEES ASSOCIATES
Coram: H. Wong, D. J. in Court
Date: 18 June 1982
1. Plaintiff brought this action to claim possession of the premises known as No.11 Shiu Fai Terrace, Moon Fair Mansion, Apartment B12, 12th floor (referred to as the suit premises) and carpark No.39 of t that building on the grounds that 1st defendant had committed a breach of the tenancy agreement and/or Section 53(2)(e) of the Landlord & Tenant (Consolidation) Ordinance, Cap.7 by subletting those premises to 2nd defendant.
2. 1st defendant admitted the said subletting but raised the defence of waiver, while 2nd defendant adopted a neutral position and adduced no evidence.
3. In 1974 Sheung Lee Investment Co. Ltd., as stated by its director, CHIU Kai-sun, purchased the suit premises and immediately obtained plaintiff's services to manage them. This agency, as confirmed by Tseng Henson, plaintiff's accountant and person-in-charge of tenancy matters, included the letting and taking and defending legal action in respect of the managed property. In October 1978 Mr. Tseng looked after thirty- flats, including the suit premises, and followed his usual practice of advertising the availability of the suit premises for rent.
4. Miss CHOW Siu-kam, then 1st defendant's clerk, spotted that advertisement, as it was her duty to scan items in newspapers concerning premises to let, and telephoned Mr. Tseng for more information thereon. She noted down the additional particulars provided by Mr. Tseng and passed all records obtained on the suit premises to Mr Thomas Young, 1st defendant's proprietor. Mr. Young then proceeded to view the suit premises and made known to Mr Tseng his wish to lease them in his own name. On being asked for his Identity Card by Mr. Tseng, Mr. Young produced his New Zealand passport which was rejected by Mr. Tseng as being unsatisfactory, because it disclosed an almost expired visa for its holder to stay in the Colony.
5. Mr. Young subsequently instructed Piss Chow to continue the discussion with Mr. Tseng on different grounds and their negotiations finally brought the parties to an agreement. As a result, on 13th October 1978 plaintiff and 1st defendant signed not in the persence of each other a tenancy agreement in English for the lease of the suit premises for a term of three years from 16th October 1978 at a monthly rental of $4,500.00. Clause 2 of that agreement stipulates that the tenant agrees :
Not to assign or sublet or part with the possession of the said premises or any part thereof and not to take in any lodger.
||Not to use the said premises except for the tenant's private residence only.
6. In the same month and subsequent to that signing fir. Peter Brown came to Hong Kong to join Martin & Voorhees, 2nd defendant. He was then in need of private accomdation, which would be provided by his employer and, from his contact with 1st defendant, was offered the lease of the suit premises, either on an unfurnished basis at $5,600.00 or with furniture and electrical applicances at $8,000.00 in monthly rental. lie chose the latter option and both defendants on 30th October 1978 entered into a tenancy agreement whereby 1st defendant let the suit premises to 2nd defendant for a period of two years from 25th October 1978. In April 1979 a complaint was received by plaintiff that water was leaking at the suit premises. An inspection was carried out by Mr. Chiu, in the presence of Mr. Brown, when that complaint turned to be unfounded. Subsequently, rental of the suit premises for December 1979 and January 1980 was in arrears, as a result of which Mr. Tseng sent HO Yiu-wah, a messenger with two rent receipts in exchange of payment thereof. HO Yiu-wah was given two cheques which he duly handed over to Mr. Tseng. On noticing that those cheques bore the indersement ".... sublet to Martin &. Voorhees" Mr. Tseng first asked 1st defendant for replacement cheques without such indorsement but following a conversation with Mr. Young on the next day changed his mind about that request and informed 1st defendant that he would take appropriate action on 1st defendant's subletting. The above brief facts on the background of the case were not in dispute.
Defence and findings
7. 1st defendant raised five grounds in support of their defende of waiver :
First ground - Plaintiff was aware that 1st defendant carried on the business of real estate agent, and
Second ground - On 13th October 1978 Miss Chow, acting for and on behalf of 1st defendant, orally informed Mr. Tseng of plaintiff that 1st defendant was a real estate agent and would not occupy the suit premises but would sublet them.
8. These two grounds can...