Tse Yu Cheung v. Lee Kam Tong t/a Kin Wah Cafe and Another
Read the full judgment text of DCDT 1308/1974 on BabelCite. This District Court judgment.
1. The Plaintiff, as the landlord of a judgment debtor, claims arrears of rent out of the proceeds, lodged in Court, of an execution levied by a judgment creditor.
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IN THE DISTRICT COURT OF HONG KONG HOLDEN AT KOWLOON CIVIL JURISDICTION DISTRAINT NO. 1308 OF 1974 -----------------
----------------- Coram: E. de B. Bewley, D.J. Date of Judgment: 21st February, 1975 ----------------- JUDGMENT ----------------- 1. The Plaintiff, as the landlord of a judgment debtor, claims arrears of rent out of the proceeds, lodged in Court, of an execution levied by a judgment creditor. 2. On 6th December, 1974, a writ of fieri facias was issued by the Deputy Registrar, Kowloon District Court, at the instance of Messrs. Hastings & Co., acting for the judgment creditor in K.C.J. No. 9457/74. The writ was endorsed to levy $13,356.55 and costs of execution on the Defendant in that action, Kim Wah Cafe, the tenant of the Plaintiff in these proceedings. This writ was executed by the bailiff on 13th December when an air conditioning unit and other goods were ssized in the tenant's premises. 3. On 18th December Messrs. D.A. Remedios, acting for the landlord, obtained a warrant of distress for $12,000, being 3 months rent owed by the tenant. The goods being "in custodia legis" the warrant could not be executed and the bailiff very properly, and in compliance with S. 104(1) of Cap. 7, returned the warrant into court and on 19th December, advised Messrs. Hastings & Co. of the issue of the distress warrant. The goods, which had remained on the tenant's premises guarded by watchmen, were sold in one lot on 20th December for a total of $13,158. Execution costs amounted to $120. 4. On 31st December, by letter to the bailiff, Messrs. Fairbairn and Kwok claimed the air-conditioner as the property of their client, O.T.B. Finance Ltd. After advising all parties concerned by letter, the bailiff on 8th January took out an interpleader summons under O.17 r.2 of the Supreme Court Rules in respect of the actionand a summons under S.95 of Cap. 7 in respect of the distraint. Though no application under S.104(2) for the discharge of the warrant had been made within 5 days by either the execution creditor or the tenant, the bailiff did not comply with the landlord's request for payment dated 2nd January and paid into court the proceeds of sale. 5. By letter dated 10th January the judgment creditor signified his intention not to oppose the Finance Co.'s claim and, when that summons came on for hearing on 15th January, it was adjourned to 21st January when the present summons was heard. The tenant has not appeared in answer to either summons. 6. At the commencement of the hearing I raised the question whether the Court had jurisdiction to hear the claim. It seemed to me, and I am still of this view, that the claimant may legitimately dispute the landlord's right to be paid out of the proceeds of sale only if he can bring himself within either S.93 or S.95 of Cap. 7. S.104 cannot help him as it refers only to the execution creditor or the debtor and the Finance Co. is neither. He could have made an application under S.93 being "............ a person alleging himself to be the owner of any property seized under this part .........." In order to have an opportunity of applying to the Court for an order discharging a warrant such a claimant must appear before the court within 5 days of the seizure. There can be no relaxation of this rule. So Kai v. Chan King-yu 1965 H.K.L.R. 50. No such application was made by the claimant in this case and he therefore cannot avail himself of S.93. 7. Section 95 provides:
It will be noted that the section refers only to "property seized under a warrant". "Warrant" is defined in S. 75 as a warrant of distress for arrears of rent. This is not as wide as "property seized under this part" - the wording of S.93 - which would seem to include property seized under a writ in respect of which a warrant of distress is also issued, as provided for in S.104. This air-conditioner was seized under a writ, not a warrant. Mr. Fairbairn submitted that, when the judgment creditor was notified by the bailiff in accordance with S.104, the goods thereupon became seized under the warrant. This interpretation seems to me to be at variance with the plain language of the section, which clearly refers to the situation where property is seized under a warrant in the first instance. In this case the warrant could not be executed by virtue of S.104. Where the property is seized initially under a writ, the procedure laid down in S. 104 is brought into operation, but this section offers relief only to the execution creditor or debtor. For these reasons I am of the opinion that the summons was issued in error. In the absence of an application under S.104(2), the Registrar should have paid to the landlord, out of the money in Court, the amount stated in the warrant. 8. The same result is achieved when the merits of the case are considered. The air-conditioner is a cabinet model and there is no suggestion that it was a fixture as the air-conditioner in Irene Loong v. Air Engineering Corp. Ltd. Inc. & Others 1959 D.C.L.R. 192 was adjudged to be. If it was in the tenant's actual possession at the time of distraint, it was in his apparent possession and distrainable. Penta Continental Land Investment Co. Ltd. v. Chung Kwok Restaurant Ltd. 1967 D.C.L.R. 22. The bailiff is an officer of the Court and not the agent of the judgment creditor; the air-conditioner did not therefore pass into the latter's possession. The question arises as to whether, despite the execution of the writ, the air-conditioner remained in the possession of the tenant. 9. Mr. Remedios has drawn the Court's attention to Tung Wah Hospital v. Deputy Registrar, K.D.C. & another 1968 H.K.L.R. 261 in which the distress warrant had been issued after the sale in execution, but before the removal of the goods from the premises. In his judgment Mills-Owens J. reviewed the English and Hong Kong authorities and concluded that the deciding factor was S. 31 (now S. 103) which provides: "No personal property shall be removed from any premises under any writ from any court, other than writs in Crown suits, until the claim for rent due to the landlord or lessor or person entitled to receive the rent is satisfied: He held that this section conferred on a landlord a quasi-lien and express priority in respect of a claim for rent and that, though the goods upon which the landlord might have distrained had been sold, the proceeds of sale lodged in Court ought to be applied to the payment of the landlord's claim. 10. The warrant in these proceedings was issued prior to the sale and while the property remained on the tenant's premises. It follows therefore that, irrespective of the correctness of my ruling on the question of jurisdiction, the landlord must succeed. 11. I order that $12,000 be paid out of the sum in Court to the Plaintiff landlord and that the balance, after deducting the costs of execution, be paid to the claimant. The latter must pay the costs of these proceedings, but is entitled to his costs against the execution creditor on the adjourned summons in K.C.J. Action No. 9457/74.
Representation: Mr. L.J. D'Almada Remedios (D'Almada Remedios & Co.) for plaintiff. Mr. M.D. Fairbairn (Fairbairn & Kwok) for claimant. Cases cited in the judgment:- (1) 1965 H.K.L.R. 50 (2) 1959 D.C.L.R. 192 (3) 1967 D.C.L.R. 22 (4) 1968 H.K.L.R. 261 Date of hearing: 21.1.1975 Date of delivery of judgment: 18.2.1975
Representation: Mr. L.J. D'Almada Remedios (D'Almada Remedios & Co.) for plaintiff. Mr. M.D. Fairbairn (Fairbairn & Kwok) for claimant. |