Chan Ho Kwang v. Yue Yau (A Firm) and Others
Read the full judgment text of HCA 523/1969 on BabelCite. This High Court CFI judgment was delivered on 25 June 1969.
1. The plaintiff's case as pleaded in his statement of claim is: that in 1966 the registered owner of 81 Nathan Road, ground floor, was Mr. Harilela; that by lease dated 29th December 1966 the premises were let to one Kwan Kau for a period of 2 years and 5 months commencing from 1st December 1966; that subsequent to the 29th December 1966, Kwan Kau sublet a portion of the premises to each of the defendants in the five actions now before the court; that, on 15th June 1968, Mr. Harilela re-entered
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HCA000523/1969 IN THE SUPREME COURT OF HONG KONG ORIGINAL JURISDICTION ACTION NOS. 523, 524, 525, 526, 530 OF 1969 -----------------
----------------- Coram: Blair-Kerr, J. Date of Judgment: 25 June 1969 ----------------- JUDGMENT ----------------- 1. The plaintiff's case as pleaded in his statement of claim is: that in 1966 the registered owner of 81 Nathan Road, ground floor, was Mr. Harilela; that by lease dated 29th December 1966 the premises were let to one Kwan Kau for a period of 2 years and 5 months commencing from 1st December 1966; that subsequent to the 29th December 1966, Kwan Kau sublet a portion of the premises to each of the defendants in the five actions now before the court; that, on 15th June 1968, Mr. Harilela re-entered upon the whole of the ground floor in exercise of his powers under clause 5(a) of the lease, which clause provided that the landlord might re-enter upon the premises if the rent reserved, after becoming due and payable, remained unpaid for a period of 14 days; that on 17th June 1968, Mr. Harilela wrote to each of the defendants as follows:-
The defendants endorsed this letter. In the case of the defendant in O.J.524/69, the endorsement reads:-
In the case of the defendant in O.J.526/69 the date mentioned in the endorsement is 20th June 1968; and in the case of the defendants in O.J.523/69, O.J. 525/69 and O.J. 530/69, the date mentioned in the endorsement is 1st July 1968. 2. The statement of claim in each case continues thus:
3. Mr. Harilela assigned his interest in the premises to the plaintiff on 28th December 1968. 4. It is common ground that prior to 30th April 1969, a considerable number of persons were in occupation of the ground floor of 81 Nathan Road and that they have all vacated the premises with the exception of the five defendants, who refuse to do so. The plaintiff's claim against them is for possession. 5. The ground floor of 81 Nathan Road consists of certain shop premises and an arcade. The defendants in O.J. 524 and O.J. 525 are each in occupation of shop premises outside the arcade and they are still carrying on business there. The other three defendants are stall-holders and their stalls are situated inside the arcade. 6. Early in May 1969, the plaintiff closed the entrances to the arcade thereby preventing the three stall-holders from doing any business. On 16th May they applied to Mr. Justice McMullin for a mandatory order that the plaintiff open the entrances to the arcade to enable them to do business. Their applications were refused. 7. In para. 8 of his statement of defence, the defendant in O.J. Action 524 of 1969 has pleaded that:-
When the defendant filed this pleading she was acting in person. Later she took legal advice; and in an affirmation dated 11th June 1969 he stated:-
On 12th June, the defendant filed a further affirmation in which she stated:-
8. The other defendants filed statements of defence substantially to the same effect. Each of them has since taken legal advice; and their subsequent affidavits reflect a similar change of attitude. 9. The plaintiff has now applied under O.27 r.3 for summary judgment in each case. In support of his application he has filed an affidavit in which it is alleged that the ground floor of 81 Nathan Road was originally let to one Pang Liu on 1st May 1966 for a term of 3 years; that Pang Liu defaulted in payment of his rent; that Mr. Harilela re-entered as against Pang Liu but not as against the sub-tenants; and that Kwan Kau agreed to take over the principal tenancy subject to existing sub-tenancies. 10. There has been no application for amendment of the statement of claim, although counsel for the plaintiff indicated that he intended to apply for leave to amend. Nevertheless, Counsel for the plaintiff submits that the only tenancy calling for consideration by this court is that of Pang Liu; that when Pang Liu defaulted and the landlord re-entered, Kwan Kau stepped into the shoes of Pang Liu; that when Kwan Kau defaulted and the landlord re-entered, the defendants (and other persons who have since vacated the premises) stepped into the shoes of Kwan Kau; that because Pang Liu's lease was for 3 years, the Tenancy (Notice of Termination) Ordinance has no application; and that accordingly no notice of termination was necessary. 11. Counsel for the plaintiff also referred to the proceedings before Mr. Justice McMullin on 16th May in which the defendant in O.J. 530/69 is recorded as having said:-
12. Counsel for the defendants submits that it is quite inaccurate to say that if a sub-tenant is allowed to occupy premises after a forfeiture of the principal tenancy, he "takes over" or "steps into the shoes of" the principal tenant; that such a situation could only arise if the sub-tenant were to apply for relief from forfeiture by the court; that when the landlord re-entered upon Pang Liu's default, Pang's tenancy, and all sub-tenancies thereunder, came to an end; that Kwan Kau was then given a lease for 2 years and 5 months; that upon the forfeiture of Kwan Kau's lease, all sub-tenancies again came to an end; that in June 1968 the landlord (Harilela) could have ejected the defendants as trespassers; but that he did not choose to do so; that, instead, he wrote them the letter of 17th June 1968; that this letter created a new tenancy for 10 months as between himself and each of the defendants; that the Tenancy (Notice of Termination) Ordinance applies; and that each of the defendants is entitled to six months' notice of termination. 13. I agree that this court is not concerned with the tenancies in favour of Pang Liu and Kwan Kau. When the landlord re-entered on 15th June 1968, Kwan Kau's tenancy came to an end, and the defendants could then have been treated as trespassers. But the landlord did not choose to do so. Instead, he wrote to the sub-tenants saying that his re-entry had put an end to their sub-tenancies with Kwan Kau, and the letter went on to say: "You now become my tenant for the residue of the term of the lease i.e. up to the 30th day of April 1969. Your rental will be ......" Whatever rights the defendants acquired was by virtue of this letter. 14. Counsel for the plaintiff argues, in the alternative, that he is entitled to rely upon the admissions made by the defendants in their pleadings; that even if the letter of 17th June was capable of being construed as a lease for 10 months, the defendants clearly did not regard it as such; that they regarded themselves as monthly tenants, and regarded the letter of 17th June 1968 as a notice to quit, although they misunderstood the law and believed that the law gave them a right to remain in the premises for 6 months after the 30th April 1969, or alternatively that the notice to quit should have been given to them exactly 6 months prior to 30th April 1969 and not 10 months prior to that date. 15. Counsel for the defendants contends that on 17th June 1968 there was no concluded agreement for a tenancy between Mr. Harilela and the defendants because the defendants were then trespassers; that the letter of 17th June was no more than an offer of a tenancy for 10 months, which offer was either accepted as a result of the defendants' endorsement or as a result of the landlord's subsequent acceptance of rent; and that as there was no concluded contract between the landlord and the defendants on 17th June 1968, the letter of that date cannot be construed as a notice to quit because a notice to quit has to be served on "a tenant" and the defendants were not tenants until after the offer contained in the letter had been accepted by them. 16. Counsel for the plaintiff's reply to this submission is that if the letter of 17th June 1968 can be construed as a notice to quit as well as an offer of a tenancy for 10 months, then it is immaterial that on 17th June there was no concluded contract and the defendants were not then tenants; that the defendants' subsequent acceptance must be taken as an acceptance of all that the letter contained; and that the letter should be construed as being a notice to quit at the end of the 10-month term, more especially as, in their statements of defence, the defendants say unequivocally that that is how they understood the letter. 17. I find it very difficult to construe the letter of 17th June 1968 as an offer. Phraseology such as "you now become my tenant" and "please let me have your rent" seem to be indicative of a situation in which the defendants, by their conduct or otherwise, had previously signified their desire to remain in occupation of the premises as tenants and that the landlord had decided to forgo his legal right to eject them as trespassers and accept them as direct tenants for the remaining 10 months of what had originally been Kwan Kau's lease. The defendants' subsequent endorsement: "I agree" etc. merely confirmed in writing, for the benefit of the landlord, what the defendants had all along desired, namely to remain in the premises as tenants. I do not see anything in the argument that, at the moment when Mr. Harilela despatched his letter of 17th June 1968, the defendants were not tenants. In my view they were tenants, and not trespassers, from the moment Mr. Harilela wrote his letter. 18. The only question in this case is whether, in all the circumstances, the letter of 17th June 1968 is capable also of being construed as a 10 months' notice to quit. There is no doubt that the defendants regarded it as a notice to quit. They have said so in their pleadings; and I do not think that they should now be heard to say: "Having taken legal advice, I now say that I never did regard the letter as a notice to quit". 19. Mr. Harilela's letter makes no reference to the original 3 years lease with Pang. So far as he was concerned, that lease and the subsequent lease with Kwan Kau had been terminated; and, if he had been a party to these proceedings, clearly he would not have instructed his counsel to submit that because the original lease with Pang was for 3 years, the Tenancy (Notice of Termination) Ordinance could have no application to his dealings with the defendants. 20. His intention was not to eject the defendants as trespassers before the expiry of the term of the former lease with Kwan Kau; and, in writing to tell them so, he made it clear to them that they were getting 10 months occupation to which they would not otherwise have been entitled, but no more. It seems obvious that the letter was intended by him to be understood as a notice of termination. It was in fact understood in this sense; and I think that it was capable of being so understood. It is immaterial that the letter does not say expressly that it is a notice of termination and does not refer specifically to the 1962 Ordinance; and the fact that it was a 10 months, and not a six months, notice of termination is also immaterial. In my view the defendants were not entitled to any further notice of termination. 21. The applications should have been made under both O.14 r.1 and O.27 r.3. Whether a particular communication amounts to a notice to quit is a mixed question of fact and law. However, I propose to treat the applications as having been made under both rules. Only one point has been argued by counsel and the defendants could not possibly be prejudiced in any way. 22. There will therefore be judgment to the plaintiff in each case for possession and for mesne profits as claimed until possession is delivered up and costs. 23. The plaintiff further applies in each case for an order restraining the defendant (or defendants) from (i) entering and/or remaining upon the ground floor of 81, Nathan Road; and (ii) preventing or attempting to prevent workman from entering in and upon the said ground floor for the purpose of carrying out interior decoration work. 24. There will in each case be an order in terms of these applications, the defendants to pay the plaintiff's costs, if any.
Representation: C. Ching (Peter Mo & Co) for plaintiff in each case. William Chan (Deacons) for the defendants in O.J. 524 & 525 of 1969. Wesley Wong (Shea & Co.) for the defendants in O.J. 523, 526 & 530 of 1969. Judgment handed down. |