Li Wing-sun v. Wu Man
Read the full judgment text of CACV 53/1978 on BabelCite. This Court of Appeal judgment.
2. The Statement of Claim alleged a monthly tenancy arising from an oral agreement made in 1969. The Defendant admitted a tenancy at a rent of $75 a month. It was further admitted that the rent had been increased to $100 a month in 1972. The Plaintiff then alleged termination of the tenancy on 1st April 1976 by notice to quit. In denying such notice the Defendant set up an agreement by the Plaintiff to sell the land to the Defendant set up an agreement by the Plaintiff to sell the land to the De
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CACV000053/1978
----------------- Coram: Huggins and Pickering, JJ. A., and Leonard, J. Date of Judgment: 23rd November 1978. ----------------- JUDGMENT ----------------- Huggins, J.A.: This apparently simple case has produced unexpected complications. The trial judge dismissed the Plaintiff's claim for rent and mesne profits and the Plaintiff appeals against that decision. 2. The Statement of Claim alleged a monthly tenancy arising from an oral agreement made in 1969. The Defendant admitted a tenancy at a rent of $75 a month. It was further admitted that the rent had been increased to $100 a month in 1972. The Plaintiff then alleged termination of the tenancy on 1st April 1976 by notice to quit. In denying such notice the Defendant set up an agreement by the Plaintiff to sell the land to the Defendant set up an agreement by the Plaintiff to sell the land to the Defendant, a transaction which, he said, the Plaintiff had failed to complete. This alleged agreement is no longer material. 3. The learned judge disposed of the case very shortly. He found that the Plaintiff was a licensee of the Crown, that the Plaintiff had no estate or interest in the land and that there could be no relationship of landlord and tenant between the Plaintiff and the Defendant. In particular he suggested that there could be no tenancy by estoppel, because, knowing that he was a mere licensee, the Plaintiff should not have "sub-let" the premises: he could not come into court with clean hands. 4. It is clear that the reasoning of the learned judge cannot stand, for he finds that there was no tenancy when, on the pleadings, a tenancy was admitted. There is no Respondent's Notice and prima facie, therefore, the Appellant ought to succeed. However, the court was bound to raise the issue of illegality, because the occupation of Crown land by anyone other than a person holding a permit from the Crown was formerly a criminal offence: see s. 9 (subsequently s. 10) of the Summary Offences Ordinance. Although in theory a tenant is not obliged to occupy the land demised to him, it is beyond question that the sole purpose of the 1969 agreement was that the Defendant should occupy the land to which the agreement related. That agreement was, in consequence, void for illegality. 5. On 1st October 1972 s. 10 of the Summary Offences Ordinance was repealed by s. 21 of the Crown Land Ordinance, but s. 4 of the Crown Land Ordinance then prohibited occupation of Crown land otherwise than under a permit granted by the Crown, although such. occupation was no longer a criminal offence: the offence now became one of failing to vacate Crown land so occupied after notice to vacate had been served. It has been argued that, whatever may have been the position in 1969, upon the repeal of s. 10 of the Summary Offences Ordinance the Defendant became tenant at will of the Plaintiff and that by reason of the payment and acceptance of a monthly rent that tenancy at will was changed into a tenancy from month to month. Had the occupation of the Defendant in truth become lawful the Appellant might have been on firmer ground, but the Defendant's occupation was still contrary to a statutory prohibition and I do not think that he acquired a right of any kind to be upon the land. That being so, the claim of the Plaintiff was bound to fail and the inconsistency which appears in the Statement of Claim as to the date on which rent ceased to be payable is immaterial. 6. I would dismiss the appeal but, subject to anything which counsel for the Respondent may say, would make no order as to costs. 23rd November 1978. Representation:
----------------- Coram: Huggins & Pickering JJ.A. Leonard, J. Date of Judgment: 23rd November, 1978. ----------------- JUDGMENT ----------------- Leonard, J.: This is an appeal from a judgment of the District Court in an action for possession of a parcel of land in the New Territories. In his statement of claim the plaintiff/appellant claimed to have been "the permittee" of the premises in question and to have let them to the defendant "under a verbal agreement" sometime at the end of 1969 at a rent of $75 per month. The rent was increased to $100 per month sometime in 1972. He further claimed that the provisions of the Landlord & Tenant (Consolidation) Ordinance did not apply to the tenancy, that it had been properly terminated on the 1st April 1976 by notice to quit. There was a further claim for $2,400 for arrears of rent "for 24 months i.e. from 1st June 1974 to 31st May 1976" and mesne profits thereafter at the rate of $100 per month. 2. In the defence the alleged tenancy was admitted and it was claimed that the rent was increased "as from February 1972". It was, however, alleged that the premises were "purchased" from the agent of the appellant for $6,000 that the "purchase price" was to have been paid by instalments, which it was alleged were paid to the agent of the plaintiff and liability was denied. 3. By the time the case came for trial the Crown had terminated the Crown permit relating to the premises and had re-entered on them and the sole question for decision by the court was whether the plaintiff was entitled to an order for arrears of rent and mesne profits. 4. The following facts appear to have been accepted by the learned District Judge. 5. The plaintiff entered on the premises sometime in 1962 under the terms of a Crown permit the conditions of which forbade transfer. In 1969 the plaintiff's agent "let" the premises to the defendant clearly with the intention that the defendant should occupy them. There was never any question of the defendant purchasing the premises and any payments (other than rent) made by the defendant to the plaintiff's agent were made for work done for the defendant by the plaintiff's agent. The defendant had not received rent or mesne profits after 1st June 1974. The record shows that the learned trial judge held in an oral judgment that the plaintiff as permittee had no estate or interest in the land of which he was permittee and (apparently) that he therefore could not create a tenancy of it. He held that the defendant was not estopped from denying the existence of the tenancy (which was admitted in the defence!) and having referred to the cases of Sentab-Fammon v. Wong Leung trading as Tak Kee (1) and LAI Yiu v. TAM Fai & Others(2) dismissed the plaintiff's claim. 6. A number of cases decided in the District Court were cited to us. 7. In Charles Lee v. WONG Fong(3) Judge Charles had held, in an action by a Crown permittee to eject an occupier of land the subject of a Crown permit, that the occupier was a sub-tenant of the permittee and as against the permittee (not as against the Crown) he was protected by the Landlord & Tenant Ordinance. 8. In LAI Yiu v. TAM Fai & Others (2) Judge Mills-Owens had held that the issue as to whether a permittee had granted a licence or a tenancy of premises held under a Crown permit was one of fact depending on the intention of the parties and that a party being merely a Crown licensee does not, as a matter of law, prevent him from creating a tenancy. 9. In Sentab-Fammon v. Wong-Leung trading as Tak Kee (1) Judge Leathlean had held that the plaintiffs being in occupation by virtue of a Crown permit had no estate or interest in the land and that any grant by a permittee could only take effect as a licence relying on a number of cases in which it was held that requisitioning authorities having "no estate or interest in land could not, therefore, grant leases thereof and that any grants by them could only take effect as licences". 10. The District Court cases cited all turned on the question as to whether the several defendants were in occupation as tenants or licensees and not on the question as to whether they should pay for their occupation. Since the existence of a tenancy was admitted in the present case they can have little application here. 11. In this case on the pleadings and in view of the Crown's re-entry the only question of fact for decision was whether or not the interest if any of the plaintiff had been purchased by the defendant. This question was impliedly decided in favour of the plaintiff. At the hearing counsel for the defendant at the close of the case for the plaintiff submitted (notwithstanding the defendant's own pleading) that the plaintiff had had no authority to let the premises and therefore that if a tenancy had been created it was an illegal one while counsel for the plaintiff submitted that the defendant was estopped from denying the plaintiff's title (which on the pleadings he had not done). 12. In the result the learned trial judge's attention appears to have been understandably side-tracked. He held that the defendant had no estate or interest in the land of which he was a mere permittee, that the plaintiff must be taken to have known this and that the terms of the permit excluded the relationship of landlord and tenant as between himself and the Crown. As to estoppel he said:
He dismissed the plaintiff's claims for arrears of rent and mesne profits. 13. It is to be noted that illegality was not pleaded and that what counsel for the defendant had submitted was that the tenancy was an illegal one. The learned trial judge is, therefore, I consider, to be pardoned if he overlooked what I would regard as the essential point in the case, that is, whether the agreement was so tainted with illegality as to prevent either party successfully suing upon it. Before I discuss this I should like to comment briefly on the relevance of the maxim "he who comes into equity must come with clean hands". The learned trial judge apparently invoked this maxim in order to prevent the plaintiff relying on an equitable estoppel - on which, on the pleadings, the plaintiff did not have to rely. It is clear that any inequity committed by the plaintiff was not committed by him in his dealings with the defendant but in his dealings with the Crown. It had no "immediate and necessary relation to the equity sued for" (see Snell 26th Edition page 36 and the cases there quoted). The maxim had no relevance. 14. What does concern me, however, is whether the court can allow either party successfully to sue on the agreement entered into. The original agreement was entered into in 1969. It clearly visualized the occupation of Crown land by the defendant. Such occupation was then a crime. For by the then section 9 of the Summary Offences Ordinance
The plaintiff's permit itself made this clear. The parties could not rely on any transfer of this permit to justify the defendant's occupation for the permit was not transferable. The agreement was varied in that the rent was increased, according to the defence in February 1972 and according to the statement of claim "sometime in 1972". The only evidence as to the date of the increase in rent came from the plaintiff who said that the rent was increased "in 1972". On the coming into operation of the Crown Land Ordinance (Cap. 28) on the 1st October 1972 occupation of Crown land except under and in accordance with a valid current permit ceased to be an offence. By section 4 of that Ordinance "unleased land" (that is to say land neither held under a Crown lease nor vested by an Ordinance) "shall not be occupied except under a licence or a deed or memorandum of appropriation"; but unlawful occupation of Crown land is, since 1st October 1972, no longer, of itself, an offence. Section 6(4) of the Crown Land Ordinance makes it an offence not to cease to occupy unleased land (except unleased land occupied under a licence or a deed or memorandum of appropriation) as required by a notice. Can the plaintiff benefit as a result of this change in the law? I do not consider that he can for a number of reasons. Firstly we do not know the precise date on which the rent was increased. The plaintiff does not claim and it is most unlikely that the increase occurred after the change of the law. The defendant's pleading that it took place in February has not been controverted. Secondly even if the increase did occur after the change in the law that does not change the nature of the original agreement which was to commit an offence. Thirdly the occupation was continuous, and the change in law did not make it legal; it remained illegal although no longer an offence. 15. I would therefore hold that the original agreement as varied by the agreement to increase the rent was and remained illegal. This court is obliged to take notice of that illegality and the plaintiff cannot benefit by an illegality to which he was a party. He had full notice of that illegality because it was brought to his notice in the Chinese version of the Crown Land Permit which he himself produced to the court so that I have little sympathy with him. 16. I would dismiss this appeal but since I do not consider that the reasons given by the learned trial judge for arriving at the same conclusion are valid and since the question of illegality has been raised for the first time by this court I would make no order as to costs. Representation: Miss H.C. Wong (K.M. Lai & Li) for Appellant. Mr. D.M. Goodbody (Alfred Lau & Co.) for respondent. (1) (1966) D.C.L.R. 108. (2) (1957) D.C.L.R. 36. (3) (1953-56) D.C.L.R. 140.
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----------------- Coram: Huggins and Pickering, JJ.A. and Leonard, J. Date of Judgment: 23rd November, 1978. ----------------- JUDGMENT ----------------- Pickering, J.A.: I concur and there is nothing that I wish to add. Representation: Miss H.C. Wong (K.M. Lai & Li) for Appellant. D.M. Goodbody (Alfred Lau & Co.) for Respondent. |
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