Yam & Company v China United (SI) Corporation Ltd [2011] SBHC 90; HCSI-CC 54 of 2008 (12 September 2011)

IN THE HIGH COURT OF SOLOMON ISLANDS
(Chetwynd J)

Civil Claim No. 54 of 2008

BETWEEN

YAM & COMPANY
Claimant

And

CHINA UNITED (SI) CORPORATION LTD
Defendant

Mr Radclyffe for the Claimant
Ms Tongarutu for the Defendant

Date of Hearing: 9th September 2011
Date of Judgment: 12th September 2011

Judgment

1. This case involves a tenancy agreement between the parties. The Claimant was the Landlord and the Defendant was the tenant. The specifics of the case relate to an agreement executed on 17th August 2007. No one disputes the existence of the agreement. Two copies of it appear in the court book, the first at pages 36 to 38 inclusive and the second at pages 66 to 68 inclusive. There is no suggestion the copies are not identical. The only question for the court to decide is what the effect of the agreement is.

2. However, it is prudent to look at the history of dealings between the parties. The first tenancy agreement between the parties was executed on or about 11th September 2006 and covered the period 1st June 2006 to 31st December 2006 [1]. A second agreement was signed on or about 6th December 2006 [2]. The problems start with this agreement. The principal of the Claimant firm, Mr Austin Yam, says that he was on holiday at the time the agreement was signed. He states that he did not agree with the terms of the new agreement and he immediately instructed his staff to cancel it. There is a letter to that effect [3] addressed to the Defendant. The Defendant does not deny receiving the letter or the alternative tenancy agreement enclosed [4] with it.

3. As at 6th December 2006 there was a valid agreement between the parties. As at the next day, 7th December the Claimant gave notice, as it was perfectly entitled to do, and the tenancy agreement was due to come to an end one month from the date of its commencement. In other words, the second agreement lasted one month from 1st January 2007 to 31st January 2007. The Defendant does not dispute this. However an entirely different complexion is put on the facts by the Defendant. There are suggestions of duress, abuse, coercion or intimidation. Quite frankly such suggestions are patent nonsense. The Defendant could have walked away from the property and found somewhere else. The fact that rental properties were in short supply is neither here nor there. The economic reality at the time was that landlords were in a strong position and tenants were not. It is absurd to suggest the effect of market forces and the resultant ability of landlords in general and the Claimant in particular to negotiate from a strong position is evidence of duress.

4. The evidence clearly indicates the Claimant was in a strong negotiating position but not so strong that it could drive any bargain. The evidence is the Defendant refused to accept the alternative agreement which accompanied the letter of 7th December 2006. Instead the parties negotiated another tenancy agreement which was signed on 22nd February 2007 [5].

5. The agreement was for 6 months (to 31st August 2007) at a monthly rental of SBD 11,000. The major difference between this February 2007 agreement and those that went before is that there was no clause allowing either party to terminate the agreement on one months notice. The Defendants submits this is clear evidence of the greedy landlord's devious nature and Claimant's desire to coerce the Defendant into an unfair contractual relationship. It is nothing of the sort and the real reason why the clause was not included is set out in the sworn statement of Jenny Sifon filed 26th October 2010 [6]. She states, at paragraph 15 4), "The "protection" referred to by the Claimant was protection from abuse of rental increase every time a new tenancy is signed. The Defendant intentionally did not include the one month notice for fear that the Claimant might abuse it to increase the rental at his pleasure". That evidence is also pleaded in the defence filed 25th June 2006 at paragraph 3(i) [7].

6. That claim in the defence is then followed by the extraordinary and totally contradictory claim that despite "deliberately avoiding" the inclusion of the one months notice term there was, "an implied condition" the Defendant could give one months notice to terminate the agreement [8]. The Defendant does not explain in any intelligible manner how a term can be deliberately excluded one minute and yet remain an implied condition the next.

7. In submissions the Defendant refers to the comments of Cameron J in his decision on setting aside the default judgment. It should be noted that his Lordship did not have the benefit of seeing the sworn statement of Jenny Sifon or the defence. Had he done so I have no doubt his decision would have been different. The defence was filed on 25th June 2010 and the sworn statement 26th October 2010. His Lordship's ruling was handed down on 10th June 2010.

8. We then arrive at a time when the February 2007 agreement runs its course. A new agreement is signed on 17th August 2007 [9]. Any suggestion that the Defendant was coerced into signing that or any other agreement is utterly refuted by the letter addressed to the Claimant by the Defendant and dated 6th August 2007. It is included at page 65 of the court book. The terms of the agreement are crystal clear and unambiguous. The Defendants took on a tenancy of the property from 1st September 2007 to 29th February 2008 at a monthly rental of SBD 12,000. The Defendant vacated the property in October 2007 but it had a continuing obligation to pay rent to the end of February 2008. The Claimant is entitled to judgment for any unpaid rent for that period.

9. The Claimant also claims additional expenses incurred because of the Defendant's breach. The Claimant seeks to recover the cost of repairs and cleaning of the property, replacement of a missing stove and stand, cost of providing security guards, unpaid electricity charges and unpaid water charges.

10. In support of the claim for repairs and cleaning the Claimant presents a quotation from Beeps Metal Works and Construction. Unfortunately there is no evidence to suggest the Claimant incurred any actual costs for repairs and cleaning. There is evidence to the contrary, the Claimant saying he was forced to let the property at a reduced rent because of its poor condition. In the absence of any evidence of the actual costs incurred this part of the claim must fail.

11. There is contradictory evidence concerning the stove. The Defendant says when it took over the tenancy the stove was returned to the Claimant because it was in poor condition. No evidence, other than the assertion to that effect, is offered. The Claimant's evidence is that a new stove and refrigerator were installed when Ray Chu took on the property in 2005. Given the unfounded allegations of duress, intimidation and coercion, I prefer the evidence of the Claimant. The Defendant's evidence lacks any credibility. The Claimant is entitled to recover the cost of the stove. The Claimant puts the cost at SBD 1,000. The Defendant only disputes the fact that the stove was missing, it offers no evidence as to the replacement cost. The Claimant is entitled to recover SBD 1,000 being the replacement cost of the stove.

12. The Claimant also says it was forced to put in security guards to protect the property when it was empty. That is not an unreasonable action to take. No invoices are presented in respect of the claim but neither is there any suggestion by the Defendant that the sum claimed is unreasonable or was not incurred. The Claimant is entitled to recover the cost of security guards in the sum of SBD 3,000.

13. As for the unpaid water and electricity charges, no evidence is put forward to support this claim other than the "possibility" the new tenants may have paid them. In the circumstances this aspect of the claim must fail.

14. The Claimant is entitled to recover SBD 60,000 for the unpaid rent, October 2007 to February 2008. It is also entitled to recover the replacement cost of the stove and the cost of providing security. The total sum recoverable is SBD 64,000. The Defendant is entitled to have set off the "bond" of SBD 12,000 and the rent recovered from the new tenant amounting to SBD 14, 193.55. Judgment shall be entered for the Claimant for SBD 37,806.45. The Claimant is also entitled to interest on that sum. Interest shall attach to the amount of the judgment at the statutory rate from 29th February 2008 until payment.

15. The Claimant is also entitled to costs. Those costs should be taxed at the standard rate unless agreed. Given the nature of the defence and the evidence to support it I had considered awarding costs on an indemnity basis. However, in the interests of justice it is probably equitable for the Claimant just to recover standard costs.

16. Following the order made on 18th May 2011, SBD 61,600 was paid into court to abide the event. I order that the judgment debt and interest be settled from that sum forthwith. The balance shall be held pending agreement or taxation of the costs. The agreed or taxed costs shall be paid from the balance. If any funds remain following the payment of costs the remaining balance shall be paid to the Defendant.

17. When judgment was reserved in this case I indicated that the court vacation was rapidly approaching. I gave the parties the option of having the judgment delivered in open court after the vacation or publishing it during the vacation and sending written copies to them. It was agreed the judgment could be published by sending the parties written copies. If after reading the judgment the parties, or any of them, want the judgment delivered in open court as well they should inform the Registrar of the High Court and a date and time will be fixed.

Chetwynd J

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^[1] See pages 21 to 23 inclusive of the court book and pages 51 to 53.
^[2] See pages 26 to 28 and pages 55 to 57 ibid.
^[3] See page 29 ibid.
^[4] See pages 30 to 32 and 59 to 61 ibid
^[5] See pages 33 to 35 inclusive and pages 62 to 64 inclusive ibid
^[6] See pages 17 to 20 inclusive ibid
^[7] See page 11 ibid.
^[8] See paragraphs 4 (i) and (ii) of the Defence.
^[9] See pages 36 to 38 inclusive and 66 to 68 inclusive ibid