Archive for the ‘Distress’ Category

Tenancy at will: right to distrain

May 23, 2013

In Anderson v The Midland Railway Company ((1861) 3 Ellis and Ellis 614, 121 E.R. 573) L and T entered into an agreement for lease. The lease was to be under seal but, in the meantime, T was allowed into possession under the terms of an express agreement that contained a provision to the effect that rent was to be paid in the same manner as was to be provided for in the formal lease. When T fell into arrears, it was held that L had a right to distrain on L’s goods.

Cockburn C.J. said:

‘The tenancy thus created was, by the words of the agreement, at a fixed and ascertained rent, commencing at an ascertained date: and, that being so, it follows that the landlord had a right to distrain.’ (576).

Michael Lower

Distress: were goods in the apparent possession of the sub-tenant or the intermediate landlord?

September 20, 2012

In Fort Crown Investments Ltd v Tam Virginia V ([2006] HKEC 63, CA) there was a lease and a sub-lease of property. The head landlord levied distress on goods owned by the sub-tenant. The Court of Appeal decided that since the goods were actually owned by the sub-tenant, and the head landlord had notice of the sub-tenant’s claim to them, they were not in the apparent possession of the intermediate landlord.

Single co-owner can distrain without the other’s authority

August 31, 2012

In Au Wing Lun v Cheung Chun Wah ([2010] 4 HKLRD 670, CA) A and B were the joint executors of X’s will and X had died. A obtained a warrant of distress against X’s tenant in respect of unpaid rent. The tenant applied to discharge the warrant and B applied to be joined as a defendant (there was a dispute as to the validity of the will but this had no impact on the tenant’s liability). The Court of Appeal confirmed that the judge below had been right to reject the applications. Executors are entitled to apply for warrants to distrain (Landlord and Tenant (Consolidation) Ordinance, s.106). One co-owner was entitled to apply in his own name and that of the other co-owner (Landlord and Tenant (Consolidation) Ordinance, s.107). The fact that the proceedings had been brought in the name of only one of the executors was a mere procedural irregularity and of no consequence.

Distress where the goods are not owned by the tenant

June 5, 2012

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.

Goods available for distress

April 21, 2011

A bailiff can (with certain exceptions) levy distress on goods in the apparent possession of the tenant whether or not the tenant owns them.

In Xipho Development Co Ltd v CHM Holdings Ltd  ([1997] HKLRD 36, CA) the tenant was in arrears with the rent. A bailiff went to the property to execute a warrant of distress and seized goods that he found there. A third party then sought to prevent the sale of the property claiming to be the owner of them. The claim failed. The landlord was entitled to sell any goods found at the property that were in the apparent possession of the tenant (see Landlord and Tenant (Consolidation) Ordinance (Cap 7), s.87) with the exceptions found in Landlord and Tenant (Consolidation) Ordinance (Cap 7), s.88).

Goods that can be seized by bailiff under a warrant of distress

April 20, 2011

A bailiff executing a warrant of distress can seize both goods owned by the tenant and goods that are in the apparent possession of the tenant whether or not the tenant owns them.

In Kelland Co Ltd v Pacific Ace International Holdings Ltd ([2011] HKEC 427) a tenant was in arrears of rent.  A warrant of distress was issued and the bailiff seized items that he found at the property. A number of items were either  the property of the tenant but had still to be paid for or were not the tenant’s property at all. The claimants were the unpaid sellers / true owners. The claims failed. The bailiff had been entitled to seize the items. A bailiff executing a warrant of distress can seize both goods owned by the tenant and goods that are in the apparent possession of the tenant whether or not the tenant owns them.