So Chi Hung v. Lee Chun Kwai and Another

DCMP 2376/2015

MISCELLANEOUS PROCEEDINGS NO 2376 OF 2015

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DECISION

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1.This is the plaintiff’s application for an order for possession of a piece of land in Tai Lung Tsuen, Peng Chau, New Territories under Crown Land Licence No 5179, also known as “No 66, Tai Lung Tsuen, Peng Chau” (“the Land”), against the defendants.

2.The Land is a piece of Government land.  The plaintiff was the licensee under Crown Land Licence No 5179 from 1 January 1986 up to the present day.  His father was the previous licensee from 1 November 1963 under Crown Land Permit No C4986 and he passed away in 1984. 

3.The plaintiff’s father built a stone house on the Land for dwelling purposes.  From about 1975, he allowed Mr So Yiu Foon (“Mr So”) who was his clansman to occupy the stone house on the Land. 

4.In about 1985, Mr So moved out of the stone house on the Land to stay in another house in Peng Chau, following the sudden tragic death of his wife and two daughters. 

5.In about 1988, Mr So was asked by one of the villagers of Tai Lung Tsuen if his relative, namely the 1^st defendant, could stay in the stone house on the Land.  Mr So deposed that he had agreed given he did not use the house at that time, and he did not consult the plaintiff with whom he claimed to have lost contact. 

6.The 1^st defendant claimed that Mr So told him and his wife that they could occupy the stone house on the Land for as long as they wished (“the Alleged Representation”), which was disputed by Mr So. 

7.Since 1988, the 1^st defendant started to occupy the stone house on the Land as his residence.  At present he resides in the stone house with his wife and two sons.

8.The plaintiff deposed that he had not visited the Land since 1982.  In 1998, he suffered a stroke and went to Mainland China for living, and only returned to Hong Kong in about 2001.  In early 2013, he got into contact with Mr So who told him that the 1^st defendant refused to leave the Land.  They went to the Land and met the 1^st defendant’s wife, and she refused to move out of the Land and turned hostile.  The plaintiff claimed that his present residence is a public government housing unit which was purchased in his wife’s sole name in 2006.  She had deserted him for about 3 years and he feared that after their divorce he would have no place to live.  He thus intended to move back to Peng Chau to live in his father’s stone house on the Land.

9.There is no dispute that the plaintiff as the licensee of the Land deriving his interest from the paper owner (namely the Government) is entitled to bring an action to recover the Land against trespassers even though he has no proprietary interest in the Land: Manchester Airport Plc v Dutton & Ors [2000] 1 QB 133 at 151B-D (Kennedy LJ):-

“In my judgment those requirements are met in this case.  The plaintiff does have a right to possession of the land granted to it by the licence.  It is entitled “to enter and occupy” (my emphasis) the land in question.  The fact that it has only been granted the right to enter and occupy for a limited purpose (specified in clause 2 of the licence) and that, as I would accept, the grant does not create an estate in land giving the plaintiff a right to exclusive possession does not seem to me to be critical.  What matters, in my judgment, is that the plaintiff has a right to possession which meets the first of the requirements set out by Stephenson LJ, and the defendants have no right which they can pray in aid to justify their continued possession.  If it is said that such an approach blurs the distinction between different types of right and different types of remedy it seems to me that is the effect of the wording of Order 113, and the understandable object of the law has always been to grant relief to a plaintiff seeking possession who can rely on a superior title.” 

10.See also Chan Cho Fai v Hon Ying Muk, DCCJ 2935/2012 (unreported, 8 January 2014) at para 25 (H H Judge Kent Yee):-

“On these authorities, it is clear that a licensee not in occupation may claim possession against a trespasser if that is a necessary remedy to vindicate and give effect to such rights of occupation as by contract of his licensor he enjoys or that is necessary to fulfill his covenants under the licence.”

11.The 1^st defendant contended that he was entitled to remain on the Land, claiming to have spent over $600,000 to improve the stone house over the years in reliance on the Alleged Representation.  An assertion of promissory estoppel was advanced by him. 

12.On the 1^st defendant’s own case, the Alleged Representation was made by Mr So, not the plaintiff.  The 1^st defendant did not contend that Mr So had actual authority from the plaintiff to make the Alleged Representation but argued that he was somehow “clothed with the full authority” to do so on behalf of the plaintiff.  I reject the argument:-

(1) It was decided by the Court of Final Appeal that an agent could not clothe himself with apparent authority to bind his principal save in “very rare and unusual circumstances” (and the court found it very hard to conceive of any such circumstances): Thanakharn Kasikorn Thai Chamkat (Mahachon) v Akai Holdings Ltd (No 2) (2010) 3 HKCFAR 479 at paras 63 to 71 (Lord Neuberger NPJ).

(2) The 1^st defendant must therefore show that the plaintiff, by his words or conduct, had represented or permitted it to be represented that Mr So had authority to act on his behalf: Bowstead & Reynolds on Agency (20^th ed) at para 8-010 (pp 380-381).

(3) On the 1^st defendant’s own case, he treated and believed Mr So to be the owner of the Land (as he was so told by his relative who introduced Mr So to him) when he started to occupy the Land.  He had never met the plaintiff or his father, nor was he aware of their existence.  After he moved into the stone house he received electricity bills of the Land addressed to one “So Tak” (who is the plaintiff’s father).  Ms Candy Tang for the defendants submitted that this had led the 1^st defendant to think that Mr So had made the Alleged Representation on behalf of someone else but he somehow believed that Mr So was “clothed with the full authority” to do so, although he did not explain the basis for holding such belief, or identify the person who had “clothed” Mr So with authority and by what conduct.  Even if the 1^st defendant was referring to the person named in the electricity bills, that would only be “So Tak”, not the plaintiff. 

(4) For the above reasons, there is no basis to argue that the plaintiff had by words or conduct clothed Mr So with authority, particularly when the 1^st defendant did not even know the plaintiff existed.

13.In the premises, any promissory estoppel (or any irrevocable licence said to be created by the Alleged Representation) would at most bind Mr So, but not the plaintiff.  The 1^st defendant has failed to show any viable defence to resist the plaintiff’s claim for possession of the Land.  No defence was put forward by the 2^nd defendant (whom the 1^st defendant’s solicitors claim to represent) to resist the plaintiff’s claim.  I am satisfied that notices of the present proceedings have been duly given to “all other occupiers of the Land” (beyond those who gave instructions to the defendants’ solicitors) within the description of the 2^nd defendant.  Judgment must accordingly be entered against both defendants.

14.In deference to counsel’s argument and for completeness, I address two further points raised in these proceedings.

15.First, Mr Stanley Siu for the plaintiff submitted that the 1^st defendant’s case about the existence of the Alleged Representation is incapable of belief, in the light of the two written tenancy agreements which he entered into with Mr So dated 1 October 2006 and 1 October 2009 respectively whereby he acknowledged that the Land was granted to him by “So Tak tong” (literally meaning a Chinese tong set up in honour of the plaintiff’s father) under successive 3-year terms at an annual rent of $200 and any renewal on the expiry of each term must be mutually agreed, which undermined his claim that Mr So had promised him and his wife they could stay in the stone house for as long as they wished.  The 1^st defendant contended that he only signed one tenancy agreement in late 2008 (without identifying which of the two written tenancy agreements above) but since 2005 he did start paying $200 each year to Mr So.  He said he did so only because Mr So insisted him to pay, he did not want to quarrel with Mr So who was known to have some “mental problem” at the time, and also because the money was not substantial compared to the reasonable rent for a similar size unit which was around $900.  On the other hand, Mr So deposed that he requested the 1^st defendant to sign the written tenancy agreements to acknowledge that he was a mere licensee of the Land with the plaintiff’s father as the grantor (even though he did not know whether any Chinese tong for the plaintiff’s father was set up after his demise, and the plaintiff also deposed that no such tong existed) and in turn to avoid him being able to claim adverse possession of the Land, having by 2006 occupied the Land for 18 years.  Mr So claimed that he never sought to earn $200 from the 1^st defendant each year since he was not the licensee of the Land, and for this reason he returned the $600 paid by the 1^st defendant at the end of the 3-year term under the first tenancy agreement.  The 1^st defendant did not dispute that $600 was returned to him by Mr So, but he claimed that Mr So asked him to use the money for decoration of the stone house, which Mr So denied.  Whilst I do not find the 1^st defendant’s account of events convincing, it is not possible nor appropriate to resolve these factual disputes on affidavit evidence summarily.  Had I not ruled against the 1^st defendant on the issue of apparent authority of Mr So, I would have refused to make an order for possession and ordered these proceedings to be turned into and carried on as a writ action.

16.Second, Mr Siu argued that the requisite detrimental reliance for promissory estoppel was not shown by the 1^st defendant.  In particular, he argued that the substantial sum of money claimed to have been spent by the 1^st defendant on improving the stone house was not to his detriment but for his benefit, and there is also nothing to suggest that he only did so in reliance on the Alleged Representation.  I can see some force in Mr Siu’s argument, but at the same time it is also arguable that the 1^st defendant would not have spent that much money (thus to his detriment) on improving the stone house had he not been told by Mr So that he could remain for as long as he wished.  Furthermore, once Mr So’s apparent authority to make the Alleged Representation has been established, it would be an unusual case where reliance was not presumed: Akai Holdings Ltd (No 2) (supra) at para 75.  I am not prepared to rule that no detrimental reliance could be made out on the 1^st defendant’s case, but given he has failed on the issue of apparent authority of Mr So, his claim of promissory estoppel cannot get off the ground.

17.I make an order that the plaintiff do recover possession of the land described in the originating summons as “Tai Lung Tsuen, Peng Chau, New Territories”, which is also known as “No 66, Tai Lung Tsuen, Peng Chau”, and as delineated and coloured red on the plan annexed to Crown Land Licence No 5179.  There will be a stay of execution of the order for possession of the Land up to and including 29 May 2016 (as the plaintiff agreed at the hearing) to allow time for the 1^st defendant and his family to move out of the stone house and the Land.

18.I further make a costs order nisi that the 1^st defendant do pay the plaintiff’s costs of this action, including all costs reserved (if any) and costs of the hearing, to be taxed if not agreed, with certificate for counsel. Such costs order nisi shall be made absolute in 14 days in the absence of any application by summons for its variation.  The plaintiff’s own costs be taxed in accordance with the Legal Aid Regulations.

19.I thank Mr Siu and Ms Tang for their assistance.

Mr Stanley Siu, instructed by K B Chau & Co, for the plaintiff

Ms Candy Tang, instructed by Chak & Associates, for the defendants