Distress where the goods are not owned by the tenant

In Chung Ho Co Ltd v Net Power Holdings Ltd ([2012] HKEC 779) the tenant of shop premises was in arrears with the rent and a warrant of distress was issued. While the bailiffs were at the shop, W called to claim that he, rather than the tenant, was the owner of the goods. The bailiffs were not convinced. They seized the goods and took out an interpleader summons. The District Court held that the goods were in the apparent possession of the tenant and so the bailiffs had been entitled to seize them (Landlord and Tenant (Consolidation) Ordinance, section 87). W had not been able to demonstrate to the court’s satisfaction that he was the owner. Even if W had been able to prove that he was the owner, that would not necessarily have resulted in a judgment in his favour: ownership was only one factor to be considered.  If W was later able to prove that he was the true owner, his remedy would be to seek reimbursement from the tenant.

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