Chuen Ming and Co Ltd v. Li Mun Hok Steven and Another
Read the full judgment text of LDPD 604/2019 on BabelCite. This Lands Tribunal judgment was delivered on 20 April 2020.
1. This is not a classic and straightforward dispute between landlord and tenant.
Cites 8 cases
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LDPD 604/2019 [2020] HKLdT 14 IN THE LANDS TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION APPLICATION NO LDPD 604 OF 2019 -------------------------
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_______________ JUDGMENT _______________ Introduction 1.This is not a classic and straightforward dispute between landlord and tenant. 2.The applicant is a limited company incorporated in Hong Kong in 1969 (“Company”) and purchased a property situate at Flat A, 20th Floor of Block 1 and the Car Parking Space No 71 on Lower Ground Floor, Estoril Court, No 55 Garden Road, Hong Kong (“Property[1]”) in November 1983. The Company commenced the proceedings in the Lands Tribunal against the respondent (“R1”) for delivery of vacant possession of the Property with claim of mesne profits on 8 April 2019 (“Company’s Application”). 3.R1 fails to file any notice of opposition and does not contest the claim up to the date of trial. 4.R1’s wife applied to join in the proceedings on 29 April 2019. Pursuant to my order dated 4 July 2019, she was allowed to be added as the 2nd respondent (“R2”) and consequential directions as to filing of her notice of opposition, witness statements etc were given. 5.The proceedings were set down for trial with 3 days reserved, in which R1 failed to appear whilst R2 with her elder son, Li Ming Fung (“Wilson”) were testified and R1’s elder brother, Lee Man For Dennis (“Dennis”) was testified for the applicant at the trial. Brief factual background 6.Li Chung also known as Lee Chung and Lee Kwong Chung (“Li Senior”) and his wife Lee Chan Woon Yin are the founders and permanent directors of the Company according to the special resolution passed on 16 October 1978 as follows:
7.Li Senior has 7 children, including 2 sons (namely Dennis and R1) and 5 daughters (namely Nancy, Helen, Ivy, Liza and Lai Mee). Li Senior together with his wife and their children had since 1983 been living in the Property. In subsequent years, the children of Li Senior except R1 left and came. All the daughters had eventually emigrated whilst Li Senior and his wife continued to live in the Property until their deaths in November 2006 and March 1993 respectively. 8.In October 1988, R1 got married with R2 in the Mainland and they gave birth to Wilson in August 1992. After obtaining her one-way permit, R2 relocated from Guangdong to Hong Kong in 1995. She then resided in the Property and gave birth to Li Ming Tak Victor (“Victor”) in December 2001. 9.The Company purchased another suite on Robinson Road (“Robinson property”) in June 1991, which was occupied by Dennis and his family. In October 2011, the Company sold the Robinson property and the sale proceeds thereof were distributed among the shareholders of the Company. 10.After the passing away of Li Senior’s wife in March 1993 and later in that year, Nancy and Dennis were appointed as directors of the Company. According to the 1994 annual return of the Company, its shareholding at that material time is as follows:
11.As at 1994, the Company has 4 directors, namely Li Senior, Nancy, Dennis and Lee Tai Enterprises. 12.With respect to Lee Tai Enterprises, its shareholders were Li Senior (20%), estate of Li Senior’s wife (20%), Dennis (20%), R1 (20%) and each of Li Senior’s 5 daughters (4%) as at 1994. The directors were Li Senior, Nancy and Dennis. 13.R1 was appointed as a director of the Company in about July 1998. 14.Nancy commenced legal action against Dennis and R1 in their capacity as executors of the will of Li Senior’s wife for delay in distributing the estate in 2003. 15.After the death of Li Senior in November 2006, Nancy and Lee Tai Enterprises resigned as directors of the Company and only Dennis and R1 remained as directors. 16.The Company’s shareholding shortly before Li Senior’s death as set out in its 2006 annual return is as follows:
17.Its 5 directors were Li Senior, Nancy, Dennis, R1 and Lee Tai Enterprises at that time. 18.Li Senior died intestate in November 2006. Several litigations commenced regarding his estate. In September 2008, PricewaterhouseCoopers (“PWC”) was appointed as the administrator of Li Senior’s estate. 19.In 2010, there were discussions among members and directors of the Company about the sale of the Property at the minimum price of $55,000,000. 20.Nancy passed away on 29 April 2011. 21.On 13 July 2011, members of the Company, including R1, resolved to (i) provide free quarters to R1 until the death of Li Senior and (ii) provide free quarters to R1 thereafter until the end of June 2011[2]. On 23 November 2011, the members further resolved to let the Property to R1 for a term of 3 years and the tenancy commenced on 1 December 2011[3]. 22.On 10 September 2013, the Company (as landlord) and R1 (as tenant) signed the tenancy agreement for a term between 1 December 2011 and 30 November 2014 (“Tenancy Agreement”). The agreement signed by R1 as tenant in the presence of Mr Chow Siu Ngor, a partner of King & Wood Mallesons (“Mr SN Chow”) contained the following relevant terms:
23.On the same day, R1 paid $2,710,000 to the Company. Out of the said sum of money, $2,420,000 was the rent for December 2011 to September 2013 (22 months at the rate of $110,000 per month) and $290,000 was the agreed rental deposit. 24.Upon the expiry of the Tenancy Agreement on 30 November 2014, members of the Company resolved to renew the tenancy with R1 in 2014, 2015 and 2016. 25.On 11 December 2018, Victor Jong of PWC reported at the Extraordinary General Meeting of the Company on its sale of the Property:
26.On 19 December 2018, the Company through Gallant gave formal notice to R1 that the tenancy would terminate. 27.On 23 January 2019, Victor Jong of PWC reported at the EGM that the sale of the Property would continue after R1 moved out by 28 February 2019. 28.On 28 January 2019, Gallant wrote to R1 to confirm the extension of the deadline for delivery of vacant possession to 28 February 2019. 29.R1 has paid the rent to the Company for the period between 1 December 2011 to 28 February 2019 in the total sum of approximately $12 million. On 28 February 2019, R1 instructed King & Wood Mallesons to write to Gallant and stated “We have instructions to act for [R1], the Tenant of the Property ... our client will deliver up vacant possession of the Property on 31st March 2019”. 30.R1 failed to deliver vacant possession of the Property to the Company on 31 March 2019. In the circumstances, the Company commenced these proceedings against R1 for vacant possession and mesne profits on 8 April 2019. The Company’s case 31.The Company’s case is based on the Tenancy Agreement. In addition, at the extraordinary general meeting of the Company held on 11 December 2018[4], in which R1 was accompanied by Mr SN Chow, all members of the Company including R1 himself unanimously resolved that R1 should move out of the Property on 28 February 2019. R1 subsequently promised through his solicitors, King & Wood Mallesons to deliver vacant possession on 31 March 2019. 32.R1 has chosen not to contest the Company’s claim whereas the Company denies all R2’s claims and allegations. R2’s case 33.Basically, R2 relies on the principle of promissory estoppel. She said that Li Senior who is the head of the family as well as the de facto controller of the Company, on various occasions, on behalf of the Company had promised her family which includes R1, herself and 2 sons (“R2’s family”), to live at and occupy the Property for free for life. R2’s family continued to occupy and use the Property without disturbance until the signing of the Tenancy Agreement on 10 September 2013. 34.Due to R1’s submissive and timid personality, he was coerced by his siblings to enter into the Tenancy Agreement. 35.Mr Chan for R2 submitted that the Company had knowingly allowed R2’s family to live at the Property without any assertion of its rights or interest for seven more years after the death of Li Senior until the signing of the Tenancy Agreement. R2 claims in equity to live at and occupy the Property for free and for life, having acted to her detriment upon reasonable reliance on Li Senior’s promises. Any right that the Company might have had under the Tenancy Agreement should be subject to and confined by R2’s such equitable entitlement. 36.Mr Chan for R2 therefore prays in his opening for the following reliefs:
Legal Principles for promissory estoppel 37.The relevant legal principles are not in great dispute. In Luo Xing Juan v Estate of Hui Shui See (2009)12 HKCFAR 1, the doctrine of promissory estoppel was summarised by the Court of Final Appeal as follows:
38.For identifying the elements of the doctrine, the correct approach would be “when applying them to the facts, each element does not exist in its own watertight compartment to be kept separate from the others”[5]. Hence, a global view should be adopted when looking into the matter, including the proper interpretation of those actions in the given context to the shared background and knowledge of the parties.[6] 39.In Hong Kong Hua Qiao Co. Ltd v Cham Ka Tai [2015] 4 HKC 167, the plaintiff company previously owned and controlled by the deceased man (X) sought vacant possession of a property, where X and his mistress (the defendant) had cohabited as husband and wife. The Court of Appeal held as follows:
40.The courts in England[7] would take into consideration the element of proportionality between the detriment incurred and the remedy to be awarded. The purpose of the estoppel doctrine is to enable courts to do justice and that the outcome of such an application is just. 41.Since R2 in effect is alleging a gift or the promise of a gift to her or her family by Li Senior, a person now deceased, on behalf of the Company, the onus of proof must be on R2. 42.In addition, Lord Walker of Gestingthorpe NPJ of the Court of Final Appeal has emphasized that the court has to approach such claims with suspicion (see Yung Shu Wu v Vivienne Sung Wu (2011) 14 HKCFAR 39, para 73 cited in Kwan So Ling v Woo Kee Yiu Harry & Ors, unrep, HCA 1311/2011, 30 April 2015 at para 34):
43.His Lordship further referred again at §76 of the judgment in Yung Shu Wu’s case the onus as “the special burden assumed by a person claiming to be a donee under a gift made by a deceased person”. Pleadings issue 44.To begin with, I would like to comment on R2’s Notice of Opposition, in which she just seeks appropriate reliefs as the Tribunal shall think fit but does not specifically pray for the declarations and equitable compensation as submitted by Mr Chan for R2 in the written opening. The issue of pleadings always creates arguments in the Tribunal. 45.In my view, it is extremely undesirable when she was legally represented upon filing of the Notice to Act by her lawyer on 30 May 2019. She was also represented by counsel at the time when the order for joinder was made on 4 July 2019 and the pre-trial review on 27 September 2019. Although section 10(5)(a) of the Lands Tribunal Ordinance, Cap 17, which provides that “the proceedings of the Tribunal shall be conducted with as much informality as is consistent with attaining justice” and Direction No 4 given by the President of the Lands Tribunal on 1 July 1986 which states, inter alia, that presiding officers should not regard Notices as in the nature of pleadings by which parties are bound, I consider that the specific reliefs sought by the parties shall be clearly stated in their respective Notices, in particular when the respondent intends to seek reliefs, such as declarations and compensation, whether legal or equitable, as the applicant should be allowed to adduce evidence to contest not only the liability but also the quantum whether or not such compensation is eventually awarded by the Tribunal. Putting aside the question of the jurisdiction of the Tribunal, which will be discussed in the later part of the judgment, for case management purpose, the Tribunal may direct the applicant to file a defence to counterclaim and reply, if necessary. 46.Although Mr Lau for the Company did not make very strong objection to this matter and did not make any submission regarding prejudice occasioned to his client, I still think that the Lands Tribunal has the case management discretion to decide whether a point not set out in a notice of opposition could be relied on at the trial[8]. Whether Li Senior owned or controlled the Company and made the alleged promise(s) on its behalf? 47.As the Property has never been owned by Li Senior but by the Company, R2 will have to prove that Li Senior owned or controlled the Company and was making the alleged promise or promises on its behalf to R2 or R2’s family to live at and occupy the Property for free for life at the material times. 48.In my view, the question of the ownership and control of the Company and the question of representing the Company to make the alleged promise or promises are interrelated. However, even though Li Senior who is the head of the family as well as the permanent director of the Company, it does not follow that he was the controller of the Company and made the alleged promise or promises on behalf of the Company at the material times. R2 has the burden to adduce sufficient evidence on this issue. 49.Besides, I doubt very much that even after the death of his wife in 1993, Li Senior could be regarded by R2 as the de facto controller of the Company in law when he was the only permanent director of the Company but just holding 17.28% shares. Assuming he insisted to pass a resolution of the Company to transfer the Property to R2 or her family for free, it is questionable in law as to whether the majority shareholders of the Company might oppose by passing a special resolution to remove Li Senior as permanent director of the Company[9]. Since there is no evidence in this regard before me, I am unable to make any decision. Nonetheless, the facts of the present case are materially different in many aspects as that in Hong Kong Hua Qiao Co Ltd’s case. Whether the Company and R2 has the necessary relationship? 50.To prove promissory estoppel, the first element is the need to establish that the parties are in a relationship involving enforceable or exercisable rights, duties or powers. The Court of Final Appeal stressed that in Luo Xing Juan’s case, the couple were living together as man and wife. 51.Mr Lau for the Company argued that in the present case, the Company has no relationship with R2 and that even if one ignores the corporate veil, it is just a relationship between father-in-law and daughter-in-law. Mr Chan for R2 made no specific submission on this issue and did not cite any authority to show that relationship between father-in-law and daughter-in-law is sufficient for proving the first element. 52.In my view, as said above, each element of the doctrine does not exist in its own watertight compartment and a global view should be adopted when looking into the matter. I shall consider all the elements in a global view. Alleged 1994 promise 53.Turning to the very important element of promise, the only promise pleaded in R2’s Notice of Opposition is the one made by Li Senior in 1994 (“alleged 1994 promise”). 54.R2 said in her witness statement filed 5 June 2019 that in about 1994, Nancy suggested that R1 and his family should be living in an apartment in Tsim Sha Tsui as follows:
55.During cross-examination by Mr Lau for the Company, R2 testified that she did not know who the owner of the Property was. To be fair to R2, my understanding of her evidence is that R2 all along treated Li Senior but not the Company the owner of the Property in 1994 and only in the later stage before Li Senior’s death, she got to know that the Company is indeed the owner of the Property. However, I accept that Li Senior might even consider himself but not the Company the owner of the Property all along until his death. Everyone in his family must have shown very high respect to him and his decision. Nonetheless, it may not be the legal position as the Company is regarded as a separate legal entity, especially Li Senior was not the majority shareholder according to the 1994 annual return of the Company. Putting aside the question of the Company’s shareholding and even according to R2’s own evidence, she never said that Li Senior made the alleged 1994 promise on behalf of the Company. 56.R2 further said that the alleged 1994 promise means that not just R2 herself, but also R1, Wilson and Victor would all be entitled to eternal, exclusive and free occupation of the Property. In my view, her evidence in court is at least inconsistent with the declaration sought in her written opening where she is only asking for her exclusive occupation of the Property for free, which does not include R1, Wilson and Victor. Further, as Victor was only born in December 2001, Li Senior could hardly promise R2 in 1994 that her family includes or will include Victor. 57.R2 accepted that Li Senior was all along occupying the master room of the Property before his death and that she had no right to request Li Senior to move to another room after the alleged 1994 promise. She further accepted that Nancy had been living in the Property in about 1994 whilst Liza and her daughter were residing there in about 1994 to 1996 and R2 was not entitled to ask them to leave after Li Senior made the alleged 1994 promise. It is not R2’s evidence that the alleged 1994 promise only took effect upon death of Li Senior. 58.In 1994, apart from Li Senior, his wife, R1, Nancy, Liza and her daughter, it is not entirely clear as who else such as Helen, Ivy and Lai Mee and their respective family members were residing in the Property. Dennis and his family should be living in the Robinson property at that time. There is no evidence concerning the size of the Property and the number of bed rooms there. But I would consider that it might be a bit crowded for accommodating all these people in the Property at the same time. That is why Nancy suggested that R1 and his family should be living in the apartment in Tsim Sha Tsui. That may be one of the reasons for Li Senior to purchase the Robinson property in 1991 for accommodating Dennis and his family. However, after the sale of the Robinson property by the Company in October 2011, the sale proceeds thereof were distributed among the shareholders of the Company but did not go to the pocket of Dennis or the estate of Li Senior. It shows the common understanding of the members of Li Senior’s family concerning the ownership of the Robinson property. 59.In my view, even if Li Senior did make a promise to R2 for life occupation inside the Property for free in 1994, it can never mean exclusive occupation of the Property for herself or R2’s family. As a matter of facts which are not challenged by R2, R1’s brother and sisters were kept moving in and out from time to time as long as Li Senior allowed. It demonstrates that Li Senior would not promise R2 her exclusive occupation. 60.I find that Li Senior did allow and promise to allow the then 3 members of R2’s family (ie R1, R2 and Wilson) to reside in the Property for free in 1994 but as a matter of facts which are not challenged by R2 that during the life time of Li Senior, he never refused any of his children or grandchildren to stay inside the Property for free whenever so requested by any of them. It is understandable that due to his old age and culture, especially after the death of his wife in 1993, Li Senior would like to live together with his children and grandchildren in the same house. He would probably have to make some arrangements as to who or which family would be living in which rooms, if necessary. However, having considered the background of this case and adopted a global view, I conclude that Li Senior never promised R2 in a clear and unequivocal way and he had no intention that she or her family would be or had been granted exclusive occupation of the Property for free and for life in 1994. Alleged promise in 2000 or 2001 61.By her supplemental witness statement, R2 has added which is not pleaded in her Notice of Opposition that in 2000 or 2001, Li Senior told her that:
62.No explanation was given by R2 as to why the alleged 2000 promise was not pleaded in her Notice of Opposition. It was only subsequently mentioned in her supplemental witness statement, by then she had already signed 2 affirmations and the statement of truth verifying her Notice of Opposition. She also failed to explain why she did not mention the alleged 2000 promise in the 2 said affirmations at the trial, bearing in mind that the second one was prepared by her present legal representatives. 63.In the circumstances, I exercise my discretion to decide that the alleged 2000 promise which is not set out in R2’s Notice of Opposition could not be relied on at the trial. 64.In case I am wrong to exercise the discretion as said above, I also find that in 2000 or 2001, Li Senior never promised R2 in a clear and unequivocal way that she would be or had been granted exclusive occupation of the Property. First, I can see no reason why R1 would be unable to raise his own family at that time or in the future since R1 was already a shareholder of both the Company holding 17.28% shares and Lee Tai Enterprises holding 20% shares. Secondly, I am unable to accept that Li Senior would suddenly discuss with R2 about the marriage of Wilson[12] who was only about 8 or 9 years old in 2000 or 2001. Thirdly, apart from the evidence of R2 herself and Wilson, no other witness was present at that time. Due to the young age of Wilson, his evidence has very little weight. Lastly, even I accept that Li Senior did say something like “the Property would be sufficient for the entire family of R2 including the wife of Wilson”, I disagree that Li Senior was in mind or intended to grant exclusive occupation of the Property to R2’s family. At most, I consider that Li Senior would arrange another separate room in the Property for Wilson and his wife after his marriage. In any event, no one can tell whether by that time, Wilson and his wife would like to stay in the Property and live together with Li Senior or not. Alleged promise in 2004 or 2005 65.By her Supplemental Witness Statement, R2 has further added that in 2004 or 2005, Li Senior said:
66.Again, no explanation was given by R2 as to why the alleged 2004 promise was not pleaded in her Notice of Opposition. For the similar reasons given as aforesaid, I exercise my discretion to decide that the alleged 2004 promise could not be relied on at the trial. 67.In any event, I further consider that in 2004 or 2005, Li Senior never promised R2 in a clear and unequivocal way that she would be or had been granted exclusive occupation of the Property. First, I cannot accept that a wealthy man like Li Senior would need R2’s help to find a lawyer to prepare some legal documents for him. He was the founders of the Company and Lee Tai Enterprises, and probably doing some business in Nanhai or other parts of the mainland China during his life time. He must have known quite a lot of lawyers himself, in particular, I think that he had sought specific legal advice as to the unusual appointment of permanent directors of the Company by special resolution in 1978. Secondly, apart from the evidence of R2 herself, no other witness was present at that time. Although R2 claimed during the cross examination by Mr Lau for the Company that Li Senior told her to keep that secret, I fail to see why Li Senior preferred R2, but not R1 who is his son, to instruct a lawyer to prepare the necessary legal documents. Lastly, R2 admitted that she was aware of the commencement of legal proceedings by Nancy against Dennis and R1 in respect of the estate of Li Senior’s wife in 2003. As Li Senior’s health was deteriorating after 2004 or 2005 and it is reasonable to expect that there would be another litigation after the death of Li Senior concerning his estate, R2 should be eager to find a lawyer for Li Senior soonest possible after the alleged 2004 promise but eventually she did not. Also bearing in mind that R2 should have known Mr SN Chow at that time, I find that R2’s evidence in this regard is not credible. 68.To conclude, as Li Senior never promised R2 on behalf of the Company in a clear and unequivocal way that she or her family would be or had been granted exclusive occupation of the Property for free and for life, all R2’s claims and defence based on promissory estoppel is doomed to be dismissed. R2’s alternative claims 69.Apart from seeking a declaration for exclusive occupation of the Property for free until the end of her lifetime, R2 also asks in her opening for an alternative claim for exclusive occupation of the Property for free or for an appropriate monthly amount until the end of her lifetime or for a period of time as the Tribunal thinks fit. 70.Another alternative claim of R2 is that the Company’s Application be allowed subject to payment by the Company of equitable compensation for an appropriate amount to be paid to R2. 71.In short, I dismiss all these alternative claims simply because R2 adduces no evidence to support the alleged appropriate monthly amount, the alleged period of time and the alleged appropriate amount of equitable compensation for consideration by the Tribunal. As said above, if R2 did properly plead these alternative claims in her Notice of Opposition and adduce evidence in support, I can see no reason not to allow the Company to file a defence to counterclaim and reply and adduce the evidence to oppose. Hence, I exercise the discretion to decide that these alternative claims which are not set out in R2’s Notice of Opposition could not be sought at the trial. R2’s reliance and detriment 72.As said in Hong Kong Hua Qiao Co. Ltd’s case, reliance and detriment are often intertwined and therefore the term of detrimental reliance is often used. R2 has maintained her evidence that by relying on the alleged promises, she had been mainly a housewife and given up developing her own career but only assisted the Mainland business of Li Senior as directed. She further alleged to give up planning for self-acquired residence, including (but not limited to) Home Ownership Scheme units. 73.The Tribunal does not need to determine this issue as all the alleged promises were not given in a clear and unequivocal way as explained above. In case it is necessary to do so, I would say that R2 fails to discharge the burden of establishing detrimental reliance. 74.R2 has not received very high education in the Mainland, which is equivalent to Form 5 in Hong Kong. R1 got married with R2 in the Mainland in October 1988 and they gave birth to Wilson in August 1992 and then Victor in December 2001. There is simply no evidence before me as to her career after the marriage and after the birth of Wilson or whether she has been all along housewife well before the alleged promises. As the burden of establishing detrimental reliance is on R2, I reject her evidence that by relying on the alleged promises, she had been mainly a housewife taking care of her own family and Li Senior, given birth to Victor, and given up developing her own career as all these allegations are just bare assertions and not supported by other evidence. 75.Concerning her evidence that she gave up planning for self-acquired residence and Home Ownership Scheme units, I have no doubt to reject the same. In my view, if R2 really had any plan for a Home Ownership Scheme unit, she must have to consult R1 first bearing in mind that R1 came from a wealthy family. Needless to repeat, R1 did not contest these proceedings nor give evidence for himself or for R2. 76.As a matter of facts, R2’s family has been living in a self-owned duplex apartment with 4 bedrooms[13] since April 2019 although R2 claims that it was purchased for the purpose of investment. R2 also admitted that she seldom went back to the Property. 77.It seems to me that it must be the decision of R1 to move out of the Property as supported by letter of 28 February 2019 from King & Wood Mallesons. It demonstrates that even if R2 genuinely believes that Li Senior had promised to grant her or her family exclusive occupation of the Property for free and for life, she still has to move out of the Property in order to respect R1’s decision and to live together with him and the 2 sons. Whether it would be inequitable or unconscionable for the Company to recover possession of the Property? 78.Even if R2 can establish the alleged promises and detrimental reliance, I find that it would not be inequitable or unconscionable for the Company to recover possession of the Property from her on the following reasons:
The Company’s Application against R1 79.Apart from the defence of promissory estoppel, R2 deposed that R1 was coerced by his elder brother and sisters into signing the Tenancy Agreement. I doubt very much as to whether R2 is entitled to raise this defence since R1 did not contest the Company’s Application against him. There is simply no direct evidence to support her allegation except R2’s assertion that R1 is always submissive and timid. Dennis did not deny that R1 has been suffering bipolar disorder but said that his condition has been under control with proper medication. There is no medical evidence or any evidence whatsoever adduced by R2 as to the medical condition of R1 at the time of the signing of the Tenancy Agreement. 80.It is not in dispute that Mr SN Chow, a very experienced solicitor, was indeed introduced by R2 to R1 and that the Tenancy Agreement was signed by R1 in the presence of Mr SN Chow on 10 September 2013. Furthermore, R1 was kept accompanied by Mr SN Chow in most of the shareholders’ and directors’ meetings of the Company and has had the benefit of independent legal representation and advice. I fail to see how this defence of coercion can succeed. 81.Accordingly, the Company is entitled to enforce the terms of the Tenancy Agreement against R1 and in fact, R1 has agreed to deliver vacant possession of the Property on 31 March 2019 pursuant to the letter of 28 February 2019 from King & Wood Mallesons and R1 filed no notice of opposition. Hence, I find that as the tenancy between the Company and R1 is terminated by agreement, usual order for possession with mesne profits shall be granted. Whether the Tribunal has jurisdiction to grant the declaratory relief or equitable compensation purportedly sought in R2’s Opening? 82.I do not think that it is necessary to answer this question as it becomes wholly academic in view of my above decision. Just for the sake of completeness, I would express my views as follows. 83.Parties’ Counsel cite quite a number of authorities on this topic including the CA decision Mountain View (IO) v Heart Cuisine [2012] 4 HKLRD 628, in which the applicant claimed against the first respondent upon trespass on the common part service lane of the building and the second respondent intervened and claimed adverse possession of the service lane. The tribunal found for the applicant. On appeal, counsel for the second respondent argued that the tribunal had no jurisdiction to deal with the matter involving adverse possession. The CA held:
84.The CA in Mountain View’s case had not discussed another important section which is section 8(9) of the Lands Tribunal Ordinance:
85.Another CA case not quoted by the parties is Cheung Kwong Yuen v Sun Hui Fang, CACV 112/2015 reported as [2016] 1 HKLRD 464, in which the applicant as the registered owner claimed there was a relationship of landlord and tenant with the respondent and sought vacant possession for her non-payment of rent. In opposition, the respondent advanced a case of adverse possession. The tribunal entered judgment against the respondent. On appeal, the Court of Appeal allowed the appeal, set aside the judgment, and ordered the case to be remitted to the District Court for a re-trial pursuant to the powers of the appeal court under Order 59 rule 13(4)(a) and the Lands Tribunal Ordinance, Cap 17 section 8A(1)(b). 86.It seems that in both Mountain View’s case and Cheung Kwong Yuen’s case, the respondents have just raised the defence of adverse possession but not sought any declaratory relief such as declaration for possessory title or other compensation. The tribunal and the CA in these 2 cases did confirm that the tribunal do have jurisdiction to deal with the matter involving adverse possession but did not say that if the respondents have not only raised the defence of adverse possession but also sought declaratory relief such as declaration for possessory title, whether the tribunal do have jurisdiction to grant such declaratory relief. 87.In 程雪梅 v 曾凡英& Ors (LDPD 371/2016, 13 December 2017), Judge Kot in the application for variation of costs order nisi reasoned at para 13:
88.I tend to agree with Judge Kot’s reasoning that the Tribunal has no jurisdiction to grant any declaration over the interest of R2 in the Property or any equitable compensation to her in the present case. As I allow the Company’s Application and reject the defence of promissory estoppel, R2 shall not take the matter further in some other courts due to the doctrine of res judicata. Thus, this issue becomes academic. I would further say that since R2 has been legally represented since 30 May 2019 and after the order of joinder was granted on 4 July 2019, her legal advisers shall seriously advise her as to whether the proceedings shall be transfer to the Court of First Instance[14] pursuant to the Lands Tribunal Ordinance, Cap 17 section 8A(1)(b) as suggested Mr Chan for R2 in the supplemental opening and as ordered by the CA in Cheung Kwong Yuen’s case. I would probably accede to such application if it was made timely. However, it is too late for Mr Chan to suggest transfer only in the supplemental opening dated 8 November 2019 just 3 days before the commencement of the trial which is a milestone date and cannot be removed unless in the very exceptional circumstances. Conclusion 89.Mr Lau for the Company confirmed at the hearing for closing submission that the Company only sought mesne profits against R1 but not R2. In the circumstances, I make an order as follows:
90.As costs shall follow event, I see no reason why R2 shall not bear the entire costs of the proceedings with certificate for counsel. As to the costs of the joinder application taken out on 29 April 2019 by R2 which was ordered to be reserved by my orders dated 8 May 2019 and 4 July 2019, I am of the view that the usual costs order shall be costs in the cause and I so order. Regarding the scale, the Tribunal has jurisdiction to order the costs to be taxed at the High Court scale or District Court scale under section 12 of the Lands Tribunal Ordinance. In view of the complexity of the issues in dispute, I consider such costs to be taxed at the High Court scale, if not agreed. I now make such costs orders. 91.In respect of the question of costs as against R1, I think that although he has not participated at all, he shall still be liable to pay the usual fixed costs of $3,200 to the Company for the application for default judgment. 92.All these costs orders are made on a nisi basis which shall become absolute unless any of the parties apply for variation by summons with supporting affirmation within 14 days from the date of the judgment. 93.Last but not least, I thank counsel for their assistance.
[1] In R2’s Notice of Opposition, Flat A, 20th Floor of Block 1 is defined as “Flat” and the Flat together with the Car Parking Space No 71 on Lower Ground Floor is collectively defined as “Premises” [2] Bundle A, pgs 102 - 103 [3] Bundle A, pgs 104 - 105 [4] Bundle A, pgs 59 - 60 [5] Luo Xing Juan’s case at para 56 [6] Luo Xing Juan’s case at para 57 [7] Jennings v Rice [2003] 1 P. & C.R. 8 at para 36 [8] 莫炎熙v 香港房屋委員會, CACV 147/2015, 17 August 2015, paras 29 and 30(a) [9] Bushell v Faith [1970] AC 1099 applied by J Lam J (as he then was) in Muir v Lampl and another [2005] 1 HKLRD 338 at para 25 [10] Bundle A, pg 202 [11] Bundle B, pgs 308 - 309 [12] Wilson is 李明峯born in August 1992 [13] Penthouse Duplex 7 of Block C, Mount Pavilia (傲瀧), No. 663 Clear Water Bay Road, Sai Kung, New Territories [14] In view of the market value of the Property though there is no evidence concerning its rateable value. |
Cases cited in this judgment