Wing Hang Bank Ltd v. Cheng Sau Chee

HCA003101/1978

Coram: Zimmern, J.

Date of Judgment: 12 January 1979

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JUDGMENT

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1. This is an appeal by the Plaintiff against the decision of the Registrar giving conditional leave to defend. The Plaintiff was the attorned landlord of the Defendant under a lease for 5 years commencing 1st September 1973. On the 30th June, 1978 solicitors for the Plaintiff's predecessor in title wrote to the Defendant drawing his attention that the lease will expire on the 31st August, 1978 and that he was requested to vacate and deliver up vacant possession on or before that date. By a letter dated 17th August, 1978 solicitors for the Defendant wrote to the solicitors for the Plaintiff's predecessor in title's administrators alleging that in 1973 the Defendant had paid his then landlord a sum of $21,000 as consideration for an agreed new lease for 5 years to commence after expiration of the old and the payment was evidenced by a cheque paid to his then landlord.

2. The Plaintiff issued a writ against the Defendant for possession and mesne profits and applied the summary judgment. The Defendant raises the same claim that is the Plaintiff is not entitled to possession in as much as there was an agreement in 1973 for a lease to commence after the expiration of the then existing lease. The Defendant paid his then landlord $21,000 therefor. Section 5 of Cap. 23 is too well known to bear repetition. The Defendant has not produced any memorandum in writing to satisfy section 5 in his allegation of the 5 year lease and the only issue in this case is whether the fact of payment of $21,000 on the 3rd September 1973 could be an act of part performance. In Steadman v. Steadman⁽¹⁾ the House of Lords held by majority decided that there was no general rule that the payment of money could not constitute an act of part performance of a parol contract within the meaning of the English equivalent of section 5 Cap. 23.

3. Their lordships were agreed that in a matter of this nature evidence of the oral agreement was not admissible. At page 61 Lord Reid said:

"In my view, unless the law is to be divorced from reason and principle, the rule must be that you take the whole circumstances, leaving aside evidence about the oral contract, to see whether it is proved that the acts relied on were done in reliance on a contract: that will be proved if it is shown to be more probable than not."

At page 82 Lord Simon said:

"The extent of the exclusionary rule is to preclude oral evidence to establish that the acts relied on were in part performance of a contract; in other words, the nexus between the acts and the alleged contract, or some such, cannot be established by oral testimony at the trial. But the acts themselves may be, and generally are, proved orally. Moreover, spoken words may themselves be part performance of a contract.

At page 88 Lord Salmon said:

"What the payment proves in the light of its surrounding circumstances is not a matter of law but a matter of fact. There is no rule of law which excludes evidence of the relevant circumstances surrounding the payment - save parol evidence of the contract on behalf of the person seeking to enforce the contract under which the payment is alleged to have been made."

It follows then that the Defendant's evidence of the oral contract is inadmissible. Is there any act or fact deposed to in the two affidavits filed on behalf of the Defendant which can be said to be referable to the contract alleged in this case? What were the then Circumstances? The Plaintiff's predecessor in title and the Defendant had just entered into a lease for a term of 5 years. A few days later a sum of $21,000 was paid over to the Plaintiff's predecessor in title. How can anyone say that act by itself would be a sufficient act of part performance of a contract to take effect 5 years later without being able to pinpoint any other act or fact attributable or referable to the alleged contract. In my view, Steadman v. Steadman is of no assistance to the Defendant. The appeal is allowed and there will be judgment for the Plaintiff with mesne profits from the 1st day of September, 1978 to be assessed by the Registrar or to be agreed. The Plaintiff shall also have his costs here and below. Certificate for counsel. Stay of execution for one month.

Representation:

William Waung (Yu, Tsang & Loong) for Plaintiff

Mohan Bharwaney (Fairbairn, Kwok & Wang) for Defendant

(1) (1974) 3 W.L.R. 56