POWER PLUS LTD v. FRUIT DESIGN & BUILD LTD

POWER PLUS LTD v. FRUIT DESIGN & BUILD LTD

On proper construction of the tenancy's forfeiture clause, the security deposit forfeited 'as and for liquidated damages' was intended as a pre-estimate of the landlord's loss and thus must be credited against the judgment; because the forfeited deposit exceeded the judgment and no evidence was adduced of additional quantified loss, the garnishee order nisi attaching the respondent's bank account was dismissed with costs.

Citation
POWER PLUS LTD v. FRUIT DESIGN & BUILD LTD
Parties
Applicant / Landlord: Applicant (Landlord); Respondent / Tenant: Respondent (Tenant); Garnishee: Bank of China (Hong Kong) Limited
Court
Lands Tribunal
Jurisdiction
Hong Kong
Judgment Date
27 October 2016
Case Number
LDPD173/2016
Procedural Posture
Garnishee Proceedings Arising From Landlord and Tenant Dispute / Hearing on Summons to Set Aside Garnishee Order Nisi / Show Cause Hearing
Outcome
Garnishee order nisi dismissed/discharged with costs against the applicant
Legal Topics
Forfeiture of Security Deposit, Garnishee Order, Set Off/credit, Construction of Forfeiture Clause, Costs Assessment
Source Language
EN
Landlord and Tenant Contract Law Civil Procedure Forfeiture of Security Deposit Garnishee Order Set Off/credit Construction of Forfeiture Clause Costs Assessment

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Parties

Applicant (Landlord)

Applicant / Landlord

Respondent (Tenant)

Respondent / Tenant

Bank of China (Hong Kong) Limited

Garnishee

Procedural Posture

Garnishee Proceedings Arising From Landlord and Tenant Dispute / Hearing on Summons to Set Aside Garnishee Order Nisi / Show Cause Hearing

Legal Issues

  1. 1 Whether landlord entitled to forfeit security deposit absolutely without giving credit when enforcing consent judgment
  2. 2 Whether forfeited deposit characterised as liquidated damages must be credited against landlord's judgment
  3. 3 Whether money attached under garnishee order is properly subject to execution when deposit covers judgment and further unquantified losses are alleged

Ratio Decidendi

On proper construction of the tenancy's forfeiture clause, the security deposit forfeited 'as and for liquidated damages' was intended as a pre-estimate of the landlord's loss and thus must be credited against the judgment; because the forfeited deposit exceeded the judgment and no evidence was adduced of additional quantified loss, the garnishee order nisi attaching the respondent's bank account was dismissed with costs.

Court Disposition

Garnishee order nisi dismissed/discharged with costs against the applicant

Orders

  • Garnishee order nisi dismissed/discharged
  • Costs awarded to respondent assessed at HKD 37472.5