Jet-wai Investment Co Ltd v. East Asis Paper Products Factory

HCA000932/1983

IN THE HIGH COURT OF JUSTICE

BETWEEN

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Coram: Hon. Liu J. (In Chambers)

Date: 1st July, 1983.

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JUDGMENT

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1. I need not call upon Mr. Ho, counsel for the plaintiff.

2. The plaintiff became registered owner of the premises in question on the 1st December 1982 as a successful bidder at a public auction. The assignment of the suit premises to the plaintiff dated the 2nd December 1982 vested in it All That estate, right and interest in or of the suit premises subject to the existing letting.

3. As between the defendant and the predecessor-in-title of the plaintiff, there was a Tenancy Agreement dated the 6th March 1982 for a term of 3 years commencing from the 1st April 1982 expiring on the 31st March 1985. The monthly rent reserved under that Tenancy Agreement was in. the sum of $20,000 exclusive of rates.

4. Having become the registered owner of the suit premises, on the 23rd December 1982, the plaintiff caused to be registered its assignment in the Land office by memorial no. 2351833.

5. By the writ in this action, the plaintiff claims against the defendant for possession of the suit premises, arrears of rent from the 1st December 1982 until possession together with mesne profits and costs. A Defence was filed by the defendant on the 18th February 1983, in which the defendant alleged that as at the 1st December 1982, a sum of $50,887.26 was due and owing to the defendant by the plaintiff's predecessor-in-title. The assertion was based on an alleged collateral agreement between the plaintiff's predecessor-in-title and the defendant that the plaintiff's predecessor-in-title would place or procure the placing of orders with the defendant for the supply of paper products and that the defendant would be entitled to set off against the rent payable under the said Tenancy Agreement against any sum due and payable by virtue of these orders. It was claimed that the said sum of  $50,887.26 so arose. On these allegations, the defendant sought a set off of rent due and payable to the plaintiff under the said Tenancy Agreement from the 1st December 1982.

6. It is common ground that a tenancy agreement for 3 years or less need not be registered in the Land Office against the suit premises and that the assignment to the plaintiff on the 2nd December 1982 was, indeed, subject to the usual provisions of such a tenancy agreement. The defendant has acknowledged the plaintiff's right as the landlord of the suit premises under the said Tenancy Agreement, and argument was confined to the contended right to set off arising from an alleged collateral agreement between the plaintiff's predecessor-in-title and the defendant against the rent payable to the plaintiff under the said Tenancy Agreement.

7. The alleged collateral agreement did not seek to regulate the rights and obligations of the parties qua landlord and tenant. It was no part of the allegation of the defendant that such collateral agreement, even if admissible to vary the terms of the said Tenancy Agreement, was registered against the suit premises.

8. The defendant lately claimed that there was a loan given to the. plaintiff's predecessor-in-title in the sum of $80,000 and that in addition, the plaintiff's predecessor-in-title owed the defendant a debt in the sum of $29,000. It was submitted that leave would be applied for to effect amendments to the Defence to incorporate these new allegations. On the force of these proposed amendments, the defendant claimed a further set off against the rent payable to the plaintiff under the said Tenancy Agreement. But again, none of this alleged loan or debt was the subject matter of a registration against the suit premises in the Land Office.

9. Thus, it is plain that the plaintiff took the suit premises as an assignee under the said Assignment dated the 2nd December 1982 subject only to the said Tenancy Agreement and the terms therein. No unusual terms, particularly when there was no question of trust or knowledge, may bind the plaintiff as the registered land owner.

10. In the said Tenancy Agreement, the defendant agreed to pay rent thereby reserved in advance on the first day of each and every month as provided for in the Third Schedule thereto. There would appear to be no good answer to the plaintiff's claim for possession, arrears or rent and mesne profits.

11. The plaintiff took out an Order 14 summons which came before the learned Master on the 7th June 1983. The learned Master extended utmost leniency to the defendant by granting conditional leave, conditional upon payment to the plaintiff of not all the arrears of rent claimed in the writ of summons in this action. He took into account the allegation of the defendant then raised in the sum of $50,887.26 which, I have said, cannot be any answer to the plaintiff's claim as an assignee of the suit premises duly registered in the Land Office. Allowing the defendant maximum advantage, the learned Master only ordered the defendant to pay to the plaintiff the rent and mesne profits claimed against the defendant commencing not from the 1st December 1982 but from the 1st March 1983, thus taking into account a period of 3 months representing in monetary value a sum of $60,000 at the $20,000 reserved rent a month. The learned Master imposed a further condition for payment forthwith of $80,000 being arrears for the month of March 1983 to the month of June 1983 and payment of $20,000 punctually on the 1st day of each month thereafter until the trial. The defendant was also required to pay rates to the plaintiff. Those were the conditions imposed, non-compliance of which would entitle the plaintiff to enter final judgment as claimed against the defendant.

12. None of the allegations raised before the learned Master and none of the allegations proposed to be raised on behalf of the defendant can, in my view, be an answer to the plaintiff's claim. In these circumstances, I find the generous terms contained in and imposed by the order of the learned Master on the 7th June 1983 perfectly in order and none of which can be faulted.

13. In the circumstances, it remains for me to say that the appeal against the order of the learned Master must be dismissed with costs to the plaintiff, and as the appeal is absolutely unmeritorious, I propose to order costs payable by the defendant to the plaintiff to be taxed on a common fund basis.

Representation:

Mr. Gunston of Hampton, Winter & Glynn for the Defendant.

Mr. Kenneth Ho instructed by Loh & Co. for the Plaintiff.