Chiu Kwok Lim and Others v. Chiu Butt York and Another
Read the full judgment text of HCA 810/1979 on BabelCite. This High Court CFI judgment was delivered on 31 October 1979.
1. This is a claim brought by the plaintiffs in which, inter alia, they seek a declaration against the 1st and 2nd defendants that the 1st defendant is a yearly tenant of a large property in the New Territories of which they are registered as owners and, in previous proceedings, have been declared to be bare trustees for the beneficiaries of a company known as Luen Tak. They also seek a declaration that the said tenancy is terminable by not more than one year's notice or, alternatively, a declar
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HCA000810/1979
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----------------- Coram: Mr. Commissioner Penlington in Court. Date of Judgment: 31 October 1979 ----------------- JUDGMENT ----------------- 1. This is a claim brought by the plaintiffs in which, inter alia, they seek a declaration against the 1st and 2nd defendants that the 1st defendant is a yearly tenant of a large property in the New Territories of which they are registered as owners and, in previous proceedings, have been declared to be bare trustees for the beneficiaries of a company known as Luen Tak. They also seek a declaration that the said tenancy is terminable by not more than one year's notice or, alternatively, a declaration as to the terms of the said tenancy and the notice by which it can be terminated. 2. The second defendant entered an appearance and filed a defence but did not appear at the trial and took no further part in the proceedings. 3. The plaintiffs also claim that, contrary to the terms of the tenancy, the 1st defendant is in breach of some of the covenants contained in the conditions of the original Crown lease, that he had either expressly or by implication agreed to abide by those conditions and that they were therefore entitled to immediate possession against him. It was, however, agreed that the question of the validity of the notice to quit should be dealt with first and only if the plaintiffs fail on that ground should the Court go on to consider the alternative ground on the question of possession. It was not, however, conceded that success on the first ground was a bar to recovery of damages for breach of covenant. An order was made by consent in those terms. 4. I will firstly deal with a point raised in the defence and argued by Leading Counsel for the 1st defendant in that by relying on a notice to quit and also alleging prior breaches of covenant the plaintiffs were endeavouring to pursue two lines of action which were inconsistent with each other as a notice to quit recognises the continuance of the tenancy. Relying on the doctrine of election the 1st defendant argued that the plaintiffs must decide at this stage whether to proceed on the basis of breach of covenant or on the termination of the tenancy by the notice to quit and they must furthermore abandon the alternative which they do not seek to follow. 5. I do not think that the question of election arises. If the claim for termination on the grounds of breach of covenant was to be heard first the 1st defendant may well say that such breaches had been waived by the service of the notice to quit, to which, as I understand it, the plaintiffs would plead that the notice was an unusual one in that it was served pursuant to a Court order and was immediately followed by the issue of the writ. I do not consider that the plaintiffs are required to elect a course of action and the question of waiver does not yet arise as I am at present only concerned with the terms of the tenancy and the validity of the notice to quit. 6. The claim of the plaintiffs is based on an agreement which is dated the 24th December, 1964 and which is at p.349 of bundle C of the agreed bundles of documents. It is an agreement to lease the property for a period of five years at a rental of $80,000 per annum payable by four quarterly instalments of $20,000 each. It provides that a formal lease shall be signed, when a deposit of $30,000 would be paid, and it concludes with a clause that the agreement shall be effective until the 31st January, 1965 and goes on to say "At that time if both sides consider it to be unsatisfactory then it shall be considered null and void." 7. The 1st defendant said in evidence that when he entered into possession it was pursuant to that agreement but he found he could not collect the rents from the sub-tenants and there were other difficulties. He therefore considered that the agreement came to an end on the 31st January, 1965. He did not, however, say that he told the defendants he wished to invoke the final clause of the agreement and to terminate it at that date, although he did press the 1st plaintiff for the execution of a formal lease. It has been argued that nevertheless as there were these difficulties with the sub-tenants the agreement of the 24th December did come to an end at the end of January 1965. I do not think that is correct. In the correspondence well after the 31st January, 1965 the 1st defendant clearly held himself out as the lessee. (See p. 398 and 399 of bundle C). If the agreement of 24th December 1964 came to an end on the 31st January 1965, as the 1st defendant asserts, he would be no more than a licensee thereafter and there is certainly nothing in the correspondence to support such a suggestion. 8. It did seem from the original pleadings that the 1st defendant's case was that that, while he was holding himself out as a lessee from January 1965 onwards and was pressing for a formal lease, he remained in possession, not pursuant to the agreement of the 24th December, but because of a representation made to him at about that time by the 1st plaintiff. The pleadings, however, were amended and no such evidence was given by the 1st defendant. This seems to make the document D1, which is a draft lease, and which the 1st defendant said he tendered to the 1st plaintiff on the 24th December, much less important and the 1st defendant either remained as a tenant under the agreement or he was a bare licensee. However, should the matter go further and it is considered relevant I much preferred the evidence of the 1st plaintiff on the question as to whether D1 was tendered to that of the 1st defendant and his wife. I do not believe that, whether it was in existence at that time or not, the document D1 was in fact handed to the 1st plaintiff on the 24th December, 1964 or indeed at any time either prior to or after that date. 9. I am therefore satisfied that the agreement of the 24th December, 1964 did not terminate and continued in force after the 31st January, 1965 and that the 1st defendant's rights as lessee were based on that document. 10. The 1st defendant in evidence said that he saw the 1st plaintiff several times in 1965 and told him of the difficulties he was encountering and pressed him for the execution of a formal lease. At first he was told that one NG Fuk-hing, an interpreter with Messrs. Lo and Lo, had the matter in hand but eventually at another meeting with the 1st plaintiff he was told that Lo and Lo, had advised that as there was a restraint order registered against the land and because vacant possession could not be given, a formal lease should not be executed. It is not in dispute that no such lease was in fact ever executed and nor is it in dispute that it was made clear by the 1st plaintiff on several occasions that no such lease could be signed. The 1st plaintiff said that the 1st defendant did tell him of his difficulties in getting rent from the sub-tenants, presumably due to his lack of a lease, and that the rent was reduced by an oral agreement between them from $80,000 to $60,000 per year. The 1st plaintiff, however, denied that there was ever a request from the 1st defendant that he should pay a percentage of the profits from the property instead of a fixed rent and I accept his evidence on that point. 11. The case for the 1st defendant is that at some time after the 1st January 1965, in the course of further negotiations over the terms of his tenancy and in response to his pressing for a formal lease, the 1st plaintiff, acting on behalf of and with the authority of all the plaintiffs, told him that, while he could not have a written lease, he could stay on the property as long as he liked. In reliance on that representation the 1st defendant, to the knowledge of the 1st plaintiff, spent large sums of money on the property and the plaintiffs are now estopped from denying that the 1st defendant is a tenant of the property for as long as he wishes, or at any rate to the end of the Crown lease. In the alternative by an amendment made during the course of the hearing, paragraph 19A, he says he was let into possession as one of the equitable owners thereof and cannot now be evicted. I shall deal with that alternative later. 12. The defence as finally amended was vague as to the date of the representation on which the 1st defendant relies but in fact the 1st defendant gave evidence of only one such representation. He said that at the time of signing the 24th December agreement he gave the 1st plaintiff the draft lease, D1, which he himself had prepared based on the old lease, with the previous tenant TIEN Yuen. Thereafter, he pressed for the execution of a lease based on that draft in order to be able to deal with the sub-tenants. However, in January 1968 he prepared another document, which is at bundle C p.353, which he sent to the plaintiffs by post, and also wrote a letter offering to pay some rent. (Document C 351). He then had a meeting with the 1st plaintiff when C 353 was discussed and it was at that meeting that the representation relied on was made. He said that the 1st plaintiff shook his head on reading C 353 and said it could not be signed even in that form. The 1st defendant then said that if he would not sign it he, the 1st defendant, would have to give up renting the property. The 1st plaintiff then said that the 1st defendant was his closest nephew and that he should carry on with great effort and the land would be his. In cross-examination he said that what he meant was that the 1st plaintiff said that the 1st defendant was a shareholder and should carry on with the work and henceforth he would be the one to operate and manage the land. There would be no more tenants. When asked if that was the promise on which he relied he said that was one of the reasons. The other one was that he was a shareholder. He was asked if he had expected that there would then be a formal agreement and what would he expect to be its terms. He said he did expect a formal agreement would be signed and if it was he would expect the rent to be $80,000 per year and a deposit of $30,000 would be payable. The term would be five years with a right of renewal for five years. 13. Evidence was also given regarding this crucial meeting by the 1st defendant's wife Mrs. Veronica Chiu and by the 1st plaintiff. In his evidence the 1st defendant did not specifically say that his wife was present at this meeting, which is somewhat surprising if in fact she was there. He did however say that she was present at many of the meetings he had with the 1st plaintiff and in her evidence she says she was present at this meeting. Counsel for the 1st plaintiff has commented on the discrepancy in this evidence but I am prepared to give the 1st defendant the benefit of the doubt on the point and I accept Mrs. Chiu's evidence that she was present. She said they took the document C 355 (whereas the 1st defendant said it was posted) but the 1st plaintiff said it could not be signed. She said her husband then became angry and said he would not carry on with running the property without a lease. The 1st plaintiff then said that he would see NG Fuk-hing about the agreement and after that had been fixed up and the 1st defendant had put some effort into the property the place would be his to run for the rest of his life. In future, the 1st defendant would be the one to run it. However, each year a sum of money would have to be paid so that dividends could be paid. She said that they did in fact carry on running the property and their reason for doing so had much to do with the conversation at this meeting. She said that in 1968 at their own expense they built a road called the Tai River Road and that after this land was let out for fish ponds. She said that they did not themselves pay for the conversion of the land into ponds but they collected less money from the new sub-tenants. This money was lump sum premia for obtaining the tenancy, followed by rent. The rate of premium in 1968-1969 was $80 to $90 per mou, which is approximately one-sixth of an acre, and they charged $30 to $40 less than that. She said that the rental was $50 to $60 per mou and that rate has remained unaltered. 14. The 1st plaintiff's evidence was that he had pressed the 1st defendant for rent and that the document C 354, which is the original Chinese document which is translated at C 353, was given to him by the 1st defendant in his office. He said he read it but told the 1st defendant that he had no right to accept those conditions. He said he never told the defendant he could stay on the property as long as he liked nor did he ever say that he could remain for the term of the Crown lease. Similarly, he says he did not make any such representation to the 1st defendant's wife. 15. The 1st defendant argues that I should accept the evidence given by himself and his wife as the correct version of what was said at the meeting in January 1968 and should reject that of the 1st plaintiff. His main reasons as stated in Mr. Bernacchi's final address appeared to be as follows:- (a) That something must have been said at that meeting to justify the defendant going ahead with the development of the property and the carrying out of remedial works at great expense. There is evidence that a considerable amount of such work was carried out and at p.41 of bundle A the 1st defendant sets out in his re-amended Further and Better Particulars the expenditure which he says he incurred on the property. It is to be noticed that the first four items, amounting to almost $900,000. were incurred up to January 1968. The other two items are after January 1968 but are, however, substantial. The first one is a claim for $400,000 being an amount expended on roads and paths between March 1968 and October 1968. The original dates were March 1967 to October 1968 which would have put the alleged representation in the middle of that period but the first date was amended to 1968. This means that the very substantial sum alleged was all expended in a period of eight months. A final item, construction of other roads for use by motor vehicles between 1968 and 1979 at a total of $5,000,000. has been explained in the evidence as not being expenditure actually incurred by the 1st defendant but as reduced premia and rent for the properties that were let out as fish ponds. The sub-tenants themselves were responsible for the construction of the ponds and no money was actually spent by the 1st defendant on this development. The 1st defendant gave evidence about this and said that he had spent a considerable amount of money mainly on piling the banks of the River Tai. He said that this was done between 1965 and 1970 and the cost approximately $500,000 but he did not have any receipts for that expenditure. He also said that the Tai River was partitioned to enable it to be used for fish breeding before it was let to TAM Fu-wah. He could not say exactly how much it cost but estimated about $80-$100,000. That estimate, if relates to the fourth item in the Further and Better Particulars, is somewhat different than the amount therein stated. I will not go into the evidence he gave concerning the expenditure on roading except to say that he did say a road was built which cost about $100,000 but certainly there was no evidence either from the 1st defendant or his wife in support of the fairly massive outgoing on roads alleged to have been made between March and October 1968. The fact that this is pleaded in a separate item from the further construction of some twenty miles of road I assume indicates that it was alleged to have been paid out by the 1st defendant and not deducted from premia and rents. There is then the final item in the re-amended Further and Better Particulars of $5,000,000 for construction of roads for use by vehicles which was a reduction of premia and rent charged to the new sub-tenants. The figures given by each of those witnesses was somewhat different but there was certainly no evidence to say that after the reduction of rent had been made the income from the sub-tenants was less than what it had been before the fish ponds were constructed. On a general view of the evidence I would have been surprised if that was the case in view of the difficulties the 1st defendant had encountered in collecting rents from the old tenants. I considered that if the 1st defendant was putting forward this expenditure as being something he had done to his detriment, there was an onus on him to show such a loss. I am therefore of the view that this alleged expenditure does not support the 1st defendant's case. It seems to me that even though he was receiving a reduced rental because the new sub-tenants had to pay for the cost of construction of the fish ponds the 1st defendant stood to gain a considerable amount from this change in the use of the property and stood to loose nothing. I think that having been in possession of the property for some three years the 1st defendant, while he knew he could not get a formal lease, nevertheless felt that his possession was fairly secure. I am quite satisfied however that any expenditure which he made after January 1968 was not because of any representation made at that time and indeed on the pleadings and the evidence there does not seem to have been any such substantial expenditure. (b) The so-called master plan, D6, which was drawn up by Mr. Arthur Kwok in 1974 on the instructions of the 1st defendant at his own expense shows that the 1st defendant was confident of his long term title. I am satisfied from the evidence that this plan was prepared and any discussion on it between the 1st plaintiff and the 1st defendant was in the context of the 1st defendant selling his own shares and the shares he controlled in Luen Tak to the 1st defendant. I do not therefore think this argument advances the case for the 1st defendant on the case as pleaded. (c) The correspondence between the parties inter se and with the District Office shows that the 1st defendant held himself out as a tenant for years, was acknowledged as such by the plaintiffs and that the plaintiffs gave him all possible power to negotiate disputes and to generally manage the property. 16. This is undoubtedly so and indeed it is the plaintiff's case that he was a tenant of the property for a period of five years from the 1st January 1965 and thereafter from year to year. As such the plaintiffs had no doubt handed over responsibility to him to manage the property and to negotiate with the District Office. It was the plaintiff's case also that the 1st defendant had agreed to be responsible for the conditions of the Crown lease and naturally they so informed the District Office. It is pointed out that the 1st plaintiff regarded the land as something of a burden and I have no doubt they were anxious to obtain a suitable tenant to enter into occupation of the property and to thereafter manage it in a proper manner. I do not however see that the correspondence supports the 1st defendant's case that he was in occupation not as a tenant initially for five years and then from year to year but as a tenant for as long as he liked. Indeed, I would have expected some reference in this correspondence to that effect if that was the 1st defendant's view of the basis of his possession of the property. (d) The use of the phrase "sin pai yan" in various documents, and in particular the word "pai", indicates that the 1st plaintiff regarded the 1st defendant, as he did himself, as a tenant for a term of years. 17. Evidence on this question was given by a Mr. CHAN Kan-chu who was called by the 1st defendant as an expert witness. While he did say that the use of the word "pai" in his opinion indicates a grant for a term of years Mr. Chan admitted that the Glossary of Legal Terms did not use that word for the English word "lessee" but the word "cho" is used to translate both lessee and tenant. He agreed that the Glossary could be right. The other term "sin cho yan" is used in some letters, as indeed it is in the agreement of 24th December 1964, and the 1st defendant himself uses that expression in C 351. I therefore do not consider on the evidence that the use of this phrase in some correspondence and documents advances the 1st defendant's case. (e) The 1st defendant has sublet part of the property for long periods which he would not have done if he thought he was only a tenant from year to year. This argument is, as I understand it, based mainly on the subletting to FUNG Kau and that the 1st defendant said that the 1st plaintiff urged him to sublet the property rather than manage it himself, which the 1st plaintiff denies. The lease to FUNG Kau apparently replaced one to the previous tenant TAM Fu-wah which was from the 31st March 1968. It is argued that the 1st defendant would not have run the risk of the legal penalties involved if he had sublet for more than his own term. I am somewhat doubtful, having heard him give evidence, if he would in fact have realized that he was liable to such penalties but I am satisfied that no matter what tenancy he had he probably did not consider in 1968 that there was any great danger of his being evicted and that even without a formal lease he would be able to continue in occupation. I have considered this point, which is in the 1st defendant's favour, but do not consider a great deal of weight should be attached to it. 18. On the other view, however, it seems to me there are several cogent facts which support the argument that there was no representation as alleged. These are:- (a) Nowhere in the correspondence is any reference made by the 1st defendant to such a representation being made in January 1968 or at any other time. The letter which is at B 91, for instance, is written only four months after the representation was said to have been made sets out the basis of the 1st defendant's tenancy. If the whole basis of that tenancy had been changed in January 1968 and he was from then on relying on a representation made at that time, one would have expected to see some reference to it in that letter. Again, in a letter at 174 in bundle B the 1st defendant's solicitors are writing in June 1978 on this specific question of his tenancy. They say he has been a tenant since 1965 but no reference is made to the representation on which the 1st defendant now relies. Mr. Bernacchi says that the 1st defendant was not cross-examined on that letter and thus given a chance to explain it. I consider it is contrary to the evidence which the 1st defendant gave and it was in an agreed bundle. I think it was up to him to explain if he could in his evidence why there was no reference to the representation in that letter. Mr. Bernacchi goes on to say that the 1st defendant would not have given instructions for such a letter if he was only a yearly tenant. It seems to me that he may not have realized what his precise legal rights were at that time but if he thought he was a tenant of the property for as long as he liked surely that fact would have been stated. The first reference to the representation now relied on is in the pleadings filed in defence to the claim and even there the reference is certainly not as specific as one would expect. (b) At the time the representation was made the rent for the property was badly in arrear and the 1st plaintiff says that he had been pressing for payment, which evidence I accept. The 1st defendant in turn had been pressing for execution of the formal lease envisaged in the agreement of the 24th December 1964. The 1st defendant himself says it would have been a lease for five years with right of renewal for a further five years. Even if that term had run from January 1968, and I do not think that was ever the intention, it would have now expired. The 1st plaintiff says, and his evidence is not challenged on this, that he told the 1st defendant the same as he had all along, that is, he could not execute a formal five year lease. He may well have said words to the effect that even though he could not give the 1st defendant such a lease he would not be evicted during that period, i.e. the period of the contemplated five year lease, but it seems to me highly unlikely that out of the blue he should in effect give the 1st defendant a lease for an indefinite term, much more than he was seeking. (c) In an agreement which is at C 408, dated the 4th September 1978, executed by the 1st and the 2nd defendants well after the litigation had started in which his rights were very much in question, the 1st defendant agrees to transfer what is described as this yearly tenancy in the property to the 2nd defendant. He has endeavoured to back out of this document by saying that all he was selling was his rights over the sub-tenants, which is contrary to the terms of the agreement (Clause 1 p.411) and to paragraph 21 of the re-amended defence. Further, he says that the document was not properly read over to him in Chinese before he signed it. It is clear that the 1st defendant speaks and understands English quite well and I am satisfied that the terms and conditions of this document involving the sum of $80,000,000 were perfectly well-known to the 1st defendant and that clause sets out his entitlement to possession as that of a yearly tenant. As I have said, he may not have realized the precise legal position after the five year tenancy elapsed but if he did not regard himself as a yearly tenant, it seems strange to say the least that he should have allowed a clause to go into that agreement so worded. 19. Finally, having heard the evidence given by the 1st plaintiff and by the 1st defendant and his wife I considered that the 1st plaintiff is a far more reliable and convincing witness than either Mr. and Mrs. Chiu and I prefer his evidence to theirs. 20. I am therefore satisfied that the representation pleaded by the 1st defendant was never made by the 1st plaintiff. 21. Having found as a fact that the representation was not made I need not go further on that point although I am very doubtful indeed on several grounds that it would have the legal effect suggested by the 1st defendant even if it had been made. In particular, I do not think the evidence shows that he has acted to his detriment. It seems to me that having induced the incoming sub-tenants to build the fish ponds at their own expense and to compensate themselves the outgoing tenants even if there was a substantial reduction in premium and rental thereafter, the 1st defendant was acting in a way beneficial to himself and that he has enjoyed for several years thereafter the rents received from the sub-tenants, as it seems clear that the property was almost wholly converted into fish ponds by 1974. There is no documentary evidence before the Court as to the profits derived by the 1st defendant but he did estimate last year's rentals at about $500,000 and his wife says they have not increased the rentals since the tenants moved in. Furthermore, there seems little evidence that the 1st plaintiff either at the meeting in January 1968 or afterwards intended that the 1st defendant would develop the land in the way that he did. He says he did not visit the property although he did realize that it was being turned into fish ponds but there is nothing in the evidence which in my view fixes him with knowledge that the 1st defendant was expending large sums of money in developing the property, even if in fact he did so. There is certainly nothing in the subsequent correspondence or in any conversation between them given in evidence in which the 1st defendant has told the 1st plaintiff of his expenditure. The only information which the 1st plaintiff seems to have received regarding the state of affairs on the property were the letters of complaint from the District Office. In Dann v. Spurrier(1) Lord Eldon said in relation to the doctrine which is now called proprietary estoppel that -
I do not think here there is any such strong and cogent evidence even if I did accept the evidence which has been given for the 1st defendant. 22. I should also perhaps add that, while it was not pleaded, I understood Mr. Bernacchi to say in his final address that the conduct of the plaintiffs even without an actual representation could be enough to found an estoppel if the defendant altered his position on the face of such conduct. He referred me to Algar v. Middlesex County Council(2) and also to Dann v. Spurrier to which I have already referred. Having considered all the evidence, I do not find any conduct on the part of the plaintiff which could possibly amount to the sort of representation alleged by the defendant. 23. I now turn to the second limb of the defendant's case i.e. that he was led into possession as one of the equitable owners of the property and either can't be evicted or the Court has a discretion not to evict him and should exercise its discretion accordingly. Mr. Bernacchi has endeavoured to persuade me that the Court has a general discretion to allow a person who has a beneficial interest in land and is in actual possession, to remain on such terms as to the length of tenancy and rent as it should think fit. He has in particular referred me to the cases of In re Bagot's settlement(3) and Payne v. Grey(4). These cases deal with life tenants and Mr. Thomas has also referred me to In re Wythes(5), which also concerns a life tenant. I am satisfied the possession or rights of the 1st defendant as the holder of 17 out of some 720 shares in Luen Tak can in no way be compared to that of a life tenant. The evidence was that he was let into possession of the property pursuant to the agreement of the 24th December 1964 and that he remained in possession pursuant to that agreement simply as a tenant and no more. No doubt his shareholding in the company and the fact that he was a member of the family made the plaintiffs more willing to agree to his tenancy and no doubt also it has made them reluctant to take action in respect of the arrears of rent but that is a long way from giving him the equitable rights claimed under paragraph 19A of the defence. 24. Mr. Bernacchi has referred me to what he calls the high watermark of proprietary estoppel, the recent case of Pascoe v. Turner(6). There a woman who had been living with the owner of house, in reliance on his declarations that he was giving her the house, spent considerable sums of money on it. The defendant having thus acted to her detriment in reliance on and what she had been told, it was held that the plaintiff was estopped from going back on his word. The case, while it adds to the authorities on this principle does not therein break new ground. The Court did then consider how best the equity could be satisfied and in making the order that it did clearly consider it had wide powers. Here, however, I have found that there was no such declaration upon which the 1st defendant acted and I do not think that the case is therefore of assistance to him. 25. I am satisfied that there is no principle in equity which permits me to allow the 1st defendant to remain as a tenant after his legal rights have come to an end even if I considered I should do so. 26. I am satisfied that the 1st defendant entered into possession of the property on the 1st January 1965 pursuant to the agreement of the 24th December 1964 and that although that agreement calls for quarterly payments of rent it was subsequently varied by an agreement between the parties so that the rent became payable yearly. That the 1st defendant remained in occupation of the premises pursuant to that agreement until the 31st day of December 1970 and that thereafter he became a tenant from year to year and that that tenancy is therefore terminable on not more than one year's notice. There will therefore be a declaration in terms of paragraph one of the Statement of Claim. 27. I have not been asked to make an order under Clause 3 of the Statement of Claim. 28. Paragraphs 4 and 5 of the Statement of Claim do not concern me at this stage but I am also satisfied that the rent is in arrears in the total sum of $330,000. rent being payable yearly in arrears. There will therefore be judgment for that amount together with interest at the rate of 8% on each year's arrears of rent dating from the last day of each particular year. 29. The plaintiffs are entitled to their costs against both defendants based on the costs of the trial to-date. It seems to me that a great deal of the material which was only relevant to breach of covenant has been used in the issues argued and I do not consider that the costs should be as on the trial of the first issue as the matters have become so intertwined. Mr. Thomas sought a certificate for London counsel but, by agreement with Mr. Bernacchi, he saw me in Chambers later and informed me that he did not now seek that order. Indeed, I do not think there is any such animal. There will, however, be certificate for two counsel. The plaintiffs, as trustees, are entitled to full indemnity against all costs and there will be an order that they be indemnified from the trust property in the event for any reason of their costs not being paid in full. 30. Mr. Bernacchi also undertook, on behalf of the 1st defendant, that he would not dispose in any way with any part of the trust property and that a suitable draft order will be submitted.
Representation: Mr. R. Neville Thomas Q.C. & A.H. Sakhrani (T.S. Tong & Co.) for plaintiff. Mr. Brook Bernacchi Q.C. & Patrick Fung (Arthur Au & Co.) for 1st defendant. 2nd defendant absent. (1) 1779-1802 A.E.R. Reprint P.115 (2) 1945 2 A.E.R. 243 (3) 1894 1 Ch. 177 (4) 1925 1 Ch. 162 (5) 1893 2 Ch. 369 (6) 1979 1 W.L.R. 431 |