Chan Yin v. Yua Fou Sang and Others

HCA001148/1972

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

ACTION NO. 1148 OF 1972

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Coram: Cons, J. in Court

Date of Judgment: 13th November 1973

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JUDGMENT

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1. This action has been brought by the plaintiff against one Leung Pang his erstwhile partner in a small roast meat business, Mrs. Cheuk the principal tenant of the premises in which the partnership was carried on and one Yau Fou Sang the ultimate landlord. I found the latter an excellent witness and have no hesitation in accepting as true all that he told me. I have some slight reservations about Leung Pang and Mrs. Cheuk. The plaintiff was a poor witness. At times I found it hard to believe from his answers that he was paying any attention whatsoever to the content of the questions put. He feels very strongly that he has been victimized. I think these feelings not only disturbed his perspective at the time and his later recollection of events, but still are so strong that they influence his thinking whenever the matter is again raised. The facts as I find them are as follows.

2. In July 1963 Mrs Cheuk's late husband took a five-year lease from Yau Fou Sang of a ground floor shop known as No. 4 Sai On Street, Aberdeen in which he used to run a small grocery business. In July of 1968 the lease was not renewed but he remained in the premises paying rent and thus became a monthly tenant. He died in 1969 but his widow continued the business and the tenancy. Business however was not very good and in February of 1970, in order to augment her income, she sublet a small part of the premises to Leung Pang to run a roast meat business. I used the word "sublet" and later other words relating to a tenancy for convenience. The parties had originally intended a subletting, but being advised against this by their solicitors, due to the limited nature of Mrs Cheuk's interest, they finally entered into an agreement whereby Leung Pang purported to act as manager on behalf of Mrs Cheuk and to pay her a monthly sum as "profit money". Other than this Mrs Cheuk had no part in the business and it was accepted that the money was to be paid regularly whether there was a profit or not. It is immaterial now whether this agreement constituted a licence or a lease. What is important is that it was expressed to last for four years, whereas Mrs Cheuk's security of tenure was no more than the six months given to her by what used to be called the Tenancy (Notice of Termination) Ordinance.

3. At about the same time Leung Pang entered into partnership with the plaintiff using the premises leased from Mrs Cheuk. A deposit was paid, the premises were decorated and the necessary paraphernalia purchased. Business commenced on 23rd of February 1970. To begin with Leung Pang looked after the financial aspects. A few months later they were taken over by the plaintiff. Otherwise the two of them worked together in the business with the assistance of casual fokis. For nearly two years the business flourished. Each partner drew wages from the firm and in addition there were distributions of profits. Then trouble followed.

4. It come first from outside. Mrs Cheuk's grocery business unfortunately had not enjoyed the same success as the roast meat partnership. Business had continued very poor. She fell into arrears with her rent and about January 1972 it was clear that she would soon have to close her shop and return the premises to Yau Fou Sang. That, of course, also meant the end of the roast meat business, unless Yau Fou Sang was willing to continue its tenancy. The plaintiff approached him with an offer at first with regard to the small portion then occupied and later with regard to the whole shop. But Yau Fou Sang was not willing to negotiate. At that time he considered Mrs Cheuk was still his tenant, as indeed she was and she continued in possession for several months more, not moving out until forced to by a writ served in May.

5. Trouble arose between the partners themselves in the February. The dispute was over money. Accounts prepared by the plaintiff showed Leung Pang to have withdrawn $16,000 more from the partnership funds than Leung Pang was prepared to admit. Leung Pang challenged the accuracy of the accounts. That was the beginning of the end. Relations between them swiftly deteriorated, considerably aggravated by Leung Pang's helping himself to some $6,400, as he put it "to protect himself". In May the plaintiff took out the writ against him.

6. Despite their differences they continued to run the shop together, although I think it probable that at that stage Leung Pang was doing little if anything to help. It is not surprising that the volume of business dwindled. In August Leung Pang sent a solicitor's letter to the plaintiff terminating the partnership. The plaintiff replied denying Leung Pang's right to do so and Leung Pang said that he continued to work until halfway through September. After that the plaintiff carried on the business alone and eventually closed it down when Yau Fou Sang obtained judgment against him in another action in this Court in April this year.

7. The plaintiff has appeared in person throughout. His Statement of Claim is not professionally drafted and naturally does not set out his causes of action with the clarity that would otherwise be expected. Moreover it must be remembered that at the time the writ was issued the circumstances were quite different from those now pertaining, that is the business was still a going concern and Mrs Cheuk was still in possession of the remainder of the shop. Most of the many specific orders and declarations endorsed on the writ, and then copied onto the Statement of Claim, now have no point, But taking the documents together with the plaintiff's evidence and circumstances as they now stand, I think it fair to say that he alleges a conspiracy by all of the defendants to force him out of the business and a breach of the tenancy agreement by Mrs Cheuk. He asks for damages and also for an account to be taken of his partnership with Leung Pang. He would at one stage of the proceedings have accepted instead of the latter a private settlement with Leung Pang, but Leung Pang would not agree.

8. It cannot be denied that the failure of Mrs Cheuk to pay her rent and the consequent forfeiture action by Yau Fou Sang did eventually force the plaintiff to close the business. But I can find no evidence that this was collusive conduct or aimed at the plaintiff. Mrs Cheuk's conduct was dictated by financial circumstances and Yau Fou Sang acted naturally to protect his own interest as landlord. The plaintiff also relied upon several other matters and incidents as indicating the ulterior motives of the defendants, in particular what may be called, the "key incident" and the "partition incident". With regard to the first the plaintiff suggested that the key to the iron grille which protected the shop front had been tricked out of his possession by Yau Fou Sang and not returned to him for some ten days, thereby causing him great inconvenience and the partial loss of business. I do not think the incident occurred as he alleged. I accept the evidence of Yau Fou Sang that having sent for the key to investigate a suspected fire after the shop had closed one evening, he returned the key later the same night by the same messenger. If, which I doubt, serious inconvenience was later caused by perhaps some default on the part of the messenger, there is nothing to show that it was instigated by Yau Fou Sang or either of the other two defendants.

9. As to the second matter, in March or April Mrs Cheuk erected a partition dividing the roast meat business from the rest of the shop but leaving a passage-way on two sides thereof. The photographs show that what she really did was to enclose the whole of her part of the shop, but it was referred to throughout the evidence merely as a partition. The plaintiff claims she did this, in conspiracy with the other two defendants, solely to force him out of the premises. That I cannot accept. At that time Mrs Cheuk had already ceased her business as such but had left goods in her shop. Some form of protection was necessary, for otherwise, as soon as the iron grille was opened to enable the plaintiff to do his business, her goods would have been at the complete mercy of any predator who passed. In any event I do not think it did interfere with the plaintiff's business. The passage-way left on the two internal sides was sufficiently wide to allow customers in and out without difficulty. The plaintiff further claimed that it caused him to be fined $200, but it is more likely that that particular fine was imposed for a breach of a hygiene regulation which had no possible connection with the general structure of the premises.

10. The plaintiff also alleged that all three defendants sent triad society members to threaten him, and certainly he did make reports to Aberdeen Police Station on two occasions. Leung Pang however also made similar reports. It may therefore be possible that both enlisted the aid of their friends in their dispute, friends perhaps even of dubious character. But there is no admissible evidence to show that either Mrs Cheuk or Yau Fou Sang were involved in this aspect of the matter.

11. The claims for breach of tenancy are two-fold. Firstly it is said that Mrs Cheuk put an end to the tenancy before it had time to run the full four years stipulated and secondly that on two occasions she collected double rent for the same month. These claims had no chance of success from the very beginning for at no time has the plaintiff had any direct agreement with Mrs Cheuk. The agreement was between Mrs Cheuk and Leung Pang. It is true that Leung Pang would be taken as holding the benefit of that agreement in trust for the partnership but its enforcement against Mrs Cheuk could only be at his behest. Then additionally as to the second, I am not satisfied that rent was collected twice over on any occasion. The plaintiff spoke of rent receipts which supported his allegation but at no stage were they forthcoming.

12. At the close of the evidence I immediately dismissed the claims against Yau Fou Sang and Mrs Cheuk. I did this to save the plaintiff further expense. I deferred my decision with regard to Leung Pang. Naturally in so far as the claim was grounded in conspiracy it must fail against him also because a man cannot conspire with himself. But I wished to consider his position further, in particular as trustee for the partnership of his rights against Mrs Cheuk. I appreciate that this matter was not mentioned in the Statement of Claim but if it had been necessary I would have allowed an amendment. On consideration I do not think it is appropriate. The only remedy against Mrs Cheuk would have been an action for damage, but since the partnership enjoyed the use of the premises, albeit unlawfully, until the partnership was dissolved in August 1972, the damages could only have been nominal.

13. It is not clear from the partnership agreement whether Leung Pang had the right to dissolve it as he did. The appropriate section is very unhappily worded. I incline to think that despite the opening sentence of that section such a right did exist, but even if I am wrong in this not only would the damages still have been very small, because the profits had dropped to almost nothing, but the financial circumstances of Mrs Cheuk would have made it hardly worthwhile suing her.

14. It is therefore ordred that further judgment on the claim for damages be entered in favour of the third defendant and that an account be taken before the Registrar of this court of the partnership between the plaintiff and the 3rd defendant from its commencement in or about February of 1970 until the 13th of August 1973, no order is made as to the cost of this action as between the first and the third defendant.

Representation: