Link-ha Investment Ltd v. Yip Ho on and Another
Read the full judgment text of HCA 6384/1981 on BabelCite. This High Court CFI judgment.
1. The Plaintiff Company is the asignee of the suit premises which are to be found at 122, Chung On Street. It is a corner site fronting on to Chung On Street and, at its side, there is an unnamed public road, and, at its back, what was formerly a scavenging lane.
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HCA006384/1981
BETWEEN:-
__________________________ Coram: The Honourable Mr. Justice Jackson-Lipkin in Court Date: 18th May, 1983 at 11.05 a.m. Appearances: Wei, Q.C. and Hin-lee Wong for the Plaintiff. Eu for the Defendant. __________ JUDGMENT __________ 1. The Plaintiff Company is the asignee of the suit premises which are to be found at 122, Chung On Street. It is a corner site fronting on to Chung On Street and, at its side, there is an unnamed public road, and, at its back, what was formerly a scavenging lane. 2. The 1st Defendant is the tenant of the suit premises and the 2nd Defendant is a noodle store or stall or shop as the case may be,and its identity has been a matter of dispute, as has its premises. It is not in dispute that the 2nd Defendant does have some premises, which are not in the suit premises. The question is when, for how long and on what terms it was ever part of the suit premises. Originally, there was a number of sub-tenancies of the suit premises, and Ngau Kee Store was one of them, not in the portion of the premises which have formed the subject matter of this action, but in another part. Anyway, in due course, the 1st Defendant having obtained possession of all the suit premises converted it into what he calls a "market"; I am not entirely sure why he has used that name: Its nature is to be seen from Exhibit 5 and Exhibit 6, and its layout appears clearly from Exhibit 11. The interior is clearly shewn in photograph V on page 57, which was produced by the Defendant and the exterior at the time of opening, in the photograph on page 62. When the 1st Defendant caused a strong room to be built at the corner of the public road and the scavenging-lane, there was, apparently, a gap left between the wall of the strong room and the true boundary line of the suit premises. I say true boundary line because certain windows and counters built by the 1st Defendant protrude on to, and trespass over, Crown land. But no complaint is made of that behaviour in these proceedings, although under the terms of the 1st Defendant's lease, complaint could be made by the Plaintiff of those matters. Although this action began in May of last year,and finishes only today, it was not until yesterday that the measurements of that space were given to me. The depth within the boundaries of the suit premises was 23", and one gained access by means of a step which, it is common case, is on Crown land; and the total depth, including the stone step, was 2'11". 3. Some time in May of 1981, the true proprietor of the 2nd Defendant and a gentleman who has been known throughout the proceedings as "Uncle Man", approached the Defendant and asked if, while the store on the other side of the road was being re-decorated, they could temporarily store certain of their goods in the space to which I have referred. I do not believe that it ever occurred to anybody before this matter came into Court that the step did not form part of the space which was part of the tenancy of the 1st Defendant, but no point arises on that. I merely mention it because the presence of that step must have made the space seem more attractive to the persons making their request than it would have done with its true measurements within the curtilage. The 1st Defendant apparently gave permission and two refrigerated cases were put in there. One was a refrigerator as such and the other was a refrigerated show case. It is an agreed fact that the Defendant was without the Colony between 30th May and 13th June 1981. He tells me that, when he returned to the Colony, he found that, in addition to the two refrigerators which I have mentioned, a large number of other miscellaneous items had been put there - aerated water, beers, stools, tables and so on. At this point it matters not whether that is true and accurate statement of what he found, but it certainly is a summary of that which eventually found to be in use at that site. Beyond a remonstrance, he apparently did nothing about it. And, in due course, and as one would expect in Hong Kong, the space was put to profitable use, and that is best illustrated by Exhibit 4. True to the Hong Kong traditions of enterprise, the space became a well set-up store with a name board, canopy and electric light, which was supplied by unauthorised electric cable coiled across the street above the heads of passers-by, running from the Ngau Kee Store on one side to the space on the other, and the photograph, Exhibit 4, shews that store in all its glory, with a customer seated happily on the stool at a well set-up table helping himself to something which has not been defined in the course of the proceedings. 4. This came to light almost by inadvertence, when there came a visit from representatives of the asignee, that is the Plaintiff and its Solicitors, to the store which the 1st Defendant had constructed on the premises which he called the "On Cheong Market". It is not seriously disputed that, on their way there they saw, if I may so describe it, the temporary Ngau Kee Store. And, apparently, they spoke to someone in it, who promptly denied that he was the proprietor and said that he was an employee, and who said he would take them to see the actual proprietor. The place to which he took them was the On Cheong Market, which it is not disputed was the On Cheong Market, which it is not disputed was the shop of the 1st Defendant. What happened in the visit there and whereabout within the demised premises the visit and the conversations took place is a matter of quite serious dispute. I will revert to it later. 5. Suffice it to say at this point that, as a result of that visit, and of what was said, the Plaintiff Company did nothing. It accepted rent, the while pursuing certain inquiries. The result of those inquiries, strangely enough, was received the day after the receipt was issued for rent accepted subsequent to the visit I have mentioned. What was received was information from the Business Registration Office, and that information disclosed to the Plaintiff that what its representatives and Solicitors had seen in the demised premises was registered as a business in the name of somebody who was a stranger to the Plaintiff. The document itself is at B31 and, although there is no certified translation, it is accepted that it shews on Form 1A that this was a sole proprietorship under the management of Cheung Tin-chee. He was not the 1st Defendant or the 1st Defendant's servant or agent. In his application Form 1A, he described the business as Ngau Kee Store and said that it was at the side door of 122, Chung On Street, Tsuen Wan, New Territories. And the Form said that the date it commenced was 22nd May 1981. That is not the address of what I may call the true Ngau Kee Store, which is on the other side of the road, and is the address from which the electricity is taken. Upon learning of that, the Plaintiff Company's Solicitors started to take action, which eventaully resulted in the issue of a Writ. 6. The Writ was issued on 17th September 1981. Eventually, it was served, of that there is no doubt, but there is serious dispute as to how it was served, what happened when it was served, how many copies were served and what was said at the time of service. To that again, I will revert in due course. 7. Two days later, the Writ was served on, 19th September: On that very night, there was a meeting between Uncle Man and his wife, Mr. Cheung Tin-chee and the lst Defendant. It is quite clear from the evidence which was given to me that they first realised the danger of what they had done that, on that particular day. And, whatever view I formed of the 1st Defendant, this must be said, that I do not for one moment believe that he appreciated the gravity of what he was doing before 19th September, although I do believe that he knew what he was doing was wrong at an earlier stage, and that is why he gave certain answers, to which I will come back, on the visit by the representatives of the new landlord, the Plaintiff Company. That night, 19th September, these four people put their heads together and carefully and deliberately planned to deceive this Court. It is admitted by the 1st Defendant that what was done was for Court purposes. What was done was this. A letter, now Exhibit 13, was written, and it purported to be a letter from the 1st Defendant to Uncle Man of 28th May 1981. Another letter was written, which purported to be an answer from Cheung Tin-chee to the 1st Defendant dealing with that earlier alleged letter of 28th May. The second letter was dated 30th May and it is now Exhibit 14. It is perhaps appropriate that I put the text of those letters in at this point of my judgment, although I will have to deal with a significance of them later on. The first one reads as follows:- "Uncle Man, (Knowing) that you are not well, I did not pay a visit on you because I was very busy at my business. I hereby extend my compliments. The outside space by the side at the rear of my shop is used for storage of cabinet, windproof board and iron gate. Please tell Brother Ching to remove all things and don't occupy that space. With my best regards,
The alleged response reads as follows: "Mr. Yip Ho-on, Your letter has pointed out that the outer spaceby the side of your esteemed shop and the back land have been used by me for temporary storage of things for several years. There had been no complaint and they have not caused any obstruction to your shop. Regarding the public place of the street, this is my own business. Please do not interfere."It is dated 30th May 1981 and is in the name of Ngau Kee Store, and the signature is that of Cheung Tin-chee. Those letters seemed on their face so convincing that both the Solicitors for the 1st Defendant Messrs. Ip, Ku & Stoppa and Counsel for the 1st Defendant, Miss Eu were deceived thereby. It was not until just before the commencement of the hearing in May 1982 that they came to know for the first time that those letters were bogus. 8. Three days later, the space was bricked up, and that appears quite clearly from photograph B on page 56 of the photographs and photograph B on page 58. Until that day, although the Ngau Kee Store had vanished, the fascia board containing the name and an advertisement of what was served there, soft drinks, cigarettes and so on, still remained attached improperly to the Plaintiff's premises. Much evidence was, it turned out in the event, wasted, on electric lights canopies, poles, stools, L.P. gas cylinders and so on, which appear in Exhibits 5 and 6. I say wasted,because it was some time before we all realised in the course of this hearing that the place whereon the objects shewn in those two Exhibits stood was not part of the demised premises, but was in fact Crown land. But even yesterday, or the day before yesterday, the supply of electricity to that empty space remained, by means of a wire running from the true Ngau Kee Store over the street to this little space. And there is apparently a rod sticking into the wall of the demised premises, that is the wall that I mentioned was put up on 20th September, from which is suspended a bulb, and there is a metal canopy still over it. By the bricking up of the wall, if nothing else, such breach of covenant that may have been was remedied and the likelihood of a breach, or the temptation for a recurrence of a breach, was thereby removed; and such breach as there had been was brought not only to an end, but to an end beyond repetition. The space to which I refer formed less than 1% of the area of the demised premises. The writ was amended on 24th September and was re-served and again there is a dispute as to what happened on the re-service. I will come back to that in due course. 9. When this case came on for hearing I was very promptly and very properly, as one would expect from Miss Eu, told by Miss Eu that the letters dated May 1981 were in fact written in September after the service of the writ. I say that now because I wish to make it quite clear that, in this Court, no attempt was made to deceive me as to the date of those letters. If it were otherwise, this matter would almost certainly be referred to the Attorney-General. In view of all the circumstances in this case, I do not propose to send these papers to the Attorney-General: What action the Plaintiff takes is another matter. I must leave that entirely to it. Evidence was called on behalf of the Plaintiff of the visit to which I have referred and the evidence was broadly on these lines: After having seen the store, the Ngau Kee Store, - it must have caused them a degree of surprise - and having spoken to the man who said he was not the employee, they went into what was admittedly the 1st Defendant's shop, On Cheong Market, and, according to the Plaintiff's witnesses, the man from the store identified the 1st Defendant as "the proprietor" of the store, of Ngau Kee Store; and according to the Plaintiff's witnesses, the 1st Defendant, when taxed with that, promptly admitted to beind the proprietor of Ngau Kee Store, because he was the tenant of the whole premises: And, if he were the proprietor of Ngau Kee Store, then he was not doing anything wrong. So, believing in that story, having no reason not to, the Plaintiff Company was induced to, and did accept rent, after that event. That was originally pleaded as a waiver, but that point has not been pursued before me. There is a sharp conflict of evidence as to whether or not that incident ever took place.I believe it did. I believe it did for a number of reasons. One reason is that I do not believe the 1st Defendant. An other reason is I do believe the Plaintiff's witnesses. Another reason is that, as against the whole background of the case, and considering the totality of the evidence, the Plaintiff's witnesses' version is the more credible. And another reason is the actions of the Plaintiff taken as a result of things that occurred within the premises on that day. Taking those all together, I find that conversation did take place, and, having regard to the whole conduct of the 1st Defendant, I have come to the conclusion that he gave the answers he did because he knew full well that Mr. Cheung and Uncle Man ought not to have been making use of the space to which I referred: And he knew perfectly well it was wrong, and he was trying to conceal the wrong by attributing to himself the proprietorship of that store. It is a measure of the man that he could think sufficiently quickly of a careful and well designed explanation that would be self-exculpatory; it leads me to believe this is a strong possibility that he had foreseen that somebody might discover the store, and had prepared himself against the day. If he had really been taken so by surprise when he returned to the Colony on 13th June and found this illegal store in a site which he had previously permitted to be"borrowed",to use Miss Eu's phrase, for temporary storage of refrigerators, while the other Ngau Kee Store was being re-decorated, he would have done something about it. Instead of which, he did nothing: He permitted it to continue. There was an interesting feature of the evidence: When he was taxed with the duration of his permission, it turned out that it was in fact of indeterminate duration. It was 'until a cooked food stall licence could be granted' for what I have called the true Ngau Kee Store on the other side of the road. I do not have to decide if he knew, before going off on his journey overseas, to England, if my memory serves me aright, in May and June, that the space was going to be converted into a proper store or if he only found out when he came back: The fact is that he did give permission to Cheung and Man for the use of the space. But I strongly suspect that he knew perfectly well what use they were going to make of it until such time as they could get a licence for their own premises across the road, once the decoration of those premises has been finished. As I say, that is not essential to this judgment, and I do not have finally to determine it. 10. The other dispute between the parties is as to where in the premises the alleged conversations took place, and quite a lot of time was spent on whether it was upstairs or whether it was downstairs, and whether they went up first or he came down first. For the purposes of this judgment, it does not matter, because I have firmly reached the conclusion that what the Plaintiff's witnesses alleged to have been said, was in fact said. I now pass to the service of the Writ. 11. The Plaintiff's evidence is that service was effected by Mr. Cheng Yau-ming, who is a Solicitor's Clerk. He is not concerned with this action at all. In the normal course of events, he made little note for himself as to what had done. He made an affirmation of service on 9th December 1981. It never occurred to him that he would have to give evidence at a trial of the action, and he was not really sure what the action was about. He told me, and I believe him, that he looked at the papers briefly, and he thought the matter was one of contract. But what he did say was that he served Mr. Yip qua Mr. Yip, the 1st Defendant and he served Mr. Yip, qua the person having the control or management of the 2nd Defendant. Mr. Yip denies that. He said, and stuck to his version, that only one copy of the Writ was served on him. Mr. Cheng effected the second service (of the amendment) and did the same thing again. Again, Mr. Yip says only one was served on him. I know not the purpose of that denial, but I prefer and very strongly prefer the evidence of Mr. Cheng to that of Mr. Yip. I prefer it because I have seen and heard them both. But additionally, I am fortified in my belief by the conduct of Mr. Cheng thereafter: What possible reason could he have, as a Solicitor's Clerk doing a plain straightforward every-day affirmation of service, for putting something wholly false in it. Was he any way concerned with this action? No:He was just performing his ordinary duties. It is of assistance to me that I do believe Mr. Cheng on that as an almost disinterested person, because it helps me to take measure of the 1st Defendant. 12. In her submission to me on behalf of the 1st Defendant, Miss Eu took four points. One is the point of mixed construction and interpretation in the light of events and it is this. In the tenancy agreement under which the 1st Defendant holds the suit premises, the agreement which was assigned to the Plaintiff, there appears a covenant not to assign, transfer licence, sub-let or part with possession or share the possession, use or occupation of the said premises or any part thereof without the previous consent in writing of the landlord, such consent not to be unreasonablly withheld. Miss Eu urged upon me that that is a covenant of unusual wideness, and that it covers far more than it is customary: And she urges me to say that it is "null, void and meangingless", because of the past history and the intention of the parties. What she says is this. 'You know that there was a number of sub-tenancies. The landlord knew that there was a number of sub-tenancies. How can it ever have been the intention of the parties that that should apply? It could not have been, and even if it were, you should disregard it because it is meaningless in the light of those sub-tenancies and must be null and void, because the parties could never have intended that it should be binding on them'. I reminded her of the position of so many tenancies lying on the Grosvonor Estate in London: A very similar state of affairs pertained immediately following the last major war (that which ended in 1945). But, whether or not that is a good example, I must look at the wording of of the lease in question here, and look at it against the background of everything that happened. In my judgment, it is prospective. It is a clear straightforward and, I believe, almost common form type of covenant. It was never intended to refer back to what had happened before; but it was meant to bind the 1st Defendant for what should happen after the day on which the parties entered into the agreement. It is not a covenant that "at the date hereof....." that is 15th September 1980, there were then no sub-tenants: If there had been that would be a different matter. Then, if the evidence was sufficiently compelling, I could hold the covenant to be null and void if both parties were aware, at the time of the signing, that there were sub-tenants. But it does not say that, and in my judgment it does not mean that. What it means is 'From this day forth I shall not assign, transfer, license, sub-let etc.', and I am quite satisfied that, not only is that what it means, but that is what both parties intended sbould be the relationship between them thereafter. From that day forward, Mr. Yip Ho-on would make sure that, unless he went to his landlord and said, "Look, do you mind?", he would not do any of the things therein mentioned, assign the whole or any part of the premises, transfer the whole or any part of the parties, license the whole or any part of the premises, sub-let the whole or any part of the premises, part with possession of the whole or any part of the premises, share the possession of the whole or any part of the premises, share the use of the whole or any part of the premises, or share the occupation of the whole or any part of the premises. And it probably also means part with possession of the whole, or any part with the use or part with the occupation of the whole or any, but I do not need to go that far. I reject Miss Eu's submission both as to construction simpliciter and as to interpretation, against the general background of this case. 13. Miss Eu's second point was that, even if there were a breach, the principle de minimis non curat lex would apply and the Plaintiff should not be entitled to recover possession. She point out to me the percentage in area was less than 1% of the total area, and said that time was de minimis, the space was de minimis and the damage to the reversion was de minimis.In support of that, she referred me to a passage in Volume 1 of the 3rd edition of Halsbury's Laws, at page 14, which appears either not to be in the 4th Edition or certainly was so difficult to find that she has not been able to lay her hands on it. She also invited my attention to Kwong Yick-hang v. Polybag Ltd. [1974] H.K.L.R. 253. So far as time is concerned, in my judgment, it is impossible to say that that is de minimis, because, as I have said, it was indeterminate. It might be a very long time before a licence for the real Ngau Kee was issued. Indeed, if anything were known to the Police about the applicants, that licence might never be issued. The Urban Services may raise difficulties over hygiene, and a licence might never issue. In which case, the use of the landlord's premises unlawfully in breach of ovenant would have continued for years, so I can not say that the time was de minimis. 14. Space: That is a different matter. If one takes the space literally, and indulges in a mathematic calculation, it may well be possible to say that it was de minimis. A mathematical calculation is not, in my judgment, the correct way of assessing this. To give an example: If this were a back space in the corner of the cockloft away from the public eye not involving the sale of food, not trespassing on to the public foot path, not using Crown land, not in open view, not in activity that required a licence, not one which could cause possible danger by the bringing of electricity from the far corner of the road, it is possible that the Court might accede to an argument that space was de minimis, because it was less than 1%. But none of those considerations applies here, and, in my judgment, it would be quite wrong of me to make a decision on the basis of percentage. Then I pass to damage to the reversion. That is not a complete test. There may be many cases where you can say there has been no damage to the reversion, and, therefore there should be no relief because the breach is de minimis. It does not follow that it is de minimis because, by remedial measures, the breach has been remedied, or the breach was small compared with the whole, or, by the remedying of the breach, the landlord's premises are restored to their pristine whole without any damage, fiscal or financial, and there is no drop in value. The point is quite simply this: There has been a breach. It was at one time quite a serious breach in that the premises, let as a whole, were sub-divided into a shop that sold watches, jewellery, things like that, and an unlicensed food store, which could possibly have brought the law down on the head of the landlord. I do not consider it a mere trivality. And although, in the event, there has been no damage to reversion, I do not consider that it will reduce the breach to such a minute status that the de minimis rule would deprive the Plaintiff of relief. I reject that argument. 15. Thirdly Miss Eu said that technically there has not been a breach: Consider what has happened in the neighbourhood, the use of the premises, the use of that side lane, the whole area. And what happened? She said there is no real licence in the ordinary sense, and there is no real sharing of possession in the ordinary sense, and she relied very heavily on the expression "borrowing space". She urged upon me also that I should look at it in this light: Somebody approaches the 1st Defendant and said, "Look. I am having my place re-decorated: Please may I just leave some things here?" And he said, "Ngau Kee, yes, just leave them there." He goes on holiday, comes back and finds something else has happened, but just does nothing about it. She said, "Just because he has not taken all the steps that he should have taken, that can not amount to a breach." She points out to me that Clause 2(j) on page C.11 contains the word "suffer", Clauses I and K contain the word "permit": Whereas no "suffer" or "permit" appears in Clause 2(g) of the lease. Therefore, Miss Eu urges upon me, what happened in this case does not fall within the strict wording of 2(g). She urges that upon me, in addition to the argument about not taking all the steps that could have been taken, that that would not be capable of amounting to a breach. The wording of 2(g) is very clear. "Not to part with possession or share the possession, use or occupation of the said premises or any part thereof"; if it is only for storage of refrigerators, it is sharing the use of a part of the premises: Indeed, it is sharing occupation of part of the premises. Interesting arguments could arise to what type of licence it was. It appears to be a bare licence, so far as reward is concerned, because Mr. Yip says that he received no payment in return for the use of the space. But it was not a bare licece in the ordinary sense, in that if he tried to terminate it, Mr. Ching and Uncle Man and his wife could have turned round and said, "No, no, no, you can't to that. You promised us that we can use that space until we get a licence to operate our food store." And indeed they could probably have enjoined him and probably would have, because they have certainly acted to their detriment on his representation that they could use that space: However, that is as may be. My opinion is that it could be a licence, but that is not necessary for me to decide because of the other wording of Clause 2(g). I hold that there was a sharing of use, there was a sharing of occupation and that the conduct complained of did amount to a breach. 16. The fourth and last point taken by Miss Eu appeared at first sight to be most attractive. It was attractively presented, but what appeared attractive on first introduction, did not prove to be on better acquaintance. The argument runs thus: This lease was executed in September 1980 and that lease was not assigned to the present Plaintiff until August 1981 (document 4 in Bundle B o pages 23 to 29). Miss Eu says that is a breach which occurred before the assignment, because it took place, on any view, in May, if that is just the borrowing of space, or in June, when there was a setting up of the store itself, and the Plaintiff can not sue on a breach which gave rights to sue for possession to the assignor because, Miss Eu says, an assignment does not assign the right to sue for possession: And the Plaintiff's title to sue here is defective. Certainly, she concededs, if there were a specific assignment by the previous landlord with the right to sue for possession for this breach, the Plaintiff could come before me, but not, she says, at the moment. She invited my attention to certain passages in Megarry and Wade The Law of Real Property, 4th Edition on page 737, in Williams on Vendor & Purchaser, 4th Edition at page 443 and in three authorities to which I will refer in one moment. Starting with Megarry and Wade at page 737, the learned authors say this:-
(and that is the 1881 Act which replaces the 1540 Act in different terms, I mention the 1540 Act because of its being in force in Hong Kong).
and she says, that being the previous law, that is prior to 1925, prior to 1981, and that being the law in force in Hong Kong at the moment, the present Plaintiff can not sue. I will come to this particular passage later, but I do stress that the learned authors there were talking about the assignee of a reversion. And, therefore, one has to look at the authorities cited in support of that proposition. Other passages she relied on were in Williams on Vendor and Purchaser. Those passages read as follows:-
It is very noticeable there, once again, that it is an assignment of the reversion simpliciter. There is a further passage on page 448 dealing with the 1925 Act which says: -
At first; those passages seem applicable to conditions here. But one has to look at the authorities. Miss Eu relied upon three, the first being Hunt v. Remnant (1854) 9 Exch. 635; the second being Crane v. Batten (1854) 31 L.T. 402; and the third being Cohen v. Tannar [1900] 2 Q.B. 609. In Hunt v. Remnant there is a passage in the judgment of Mr. Justice Coleridge at page 641 which appears to support that argument. But it is noticeable that Mr. Justice Coleridge was dealing with an assignment which contained no words in express term passing any interests, only the general words or the estate right title and interest. Similarly, the judgment of Lord Campbell, Lord Chief Justice of the Queen's Bench, in Crane v. Batten, in the passages at the beginning and at the end of his judgment, refers only to an assignee of the bare reversion. In Cohen v. Tannar, in the judgment of A.L. Smith, L.J. at page 612, in the passages which appear to support the argument, it is quite clear that there was a bare assignment. What, therefore, do I make of those? Quite simply this, that in none of those cases was there, on my reading of the evidence before the Courts and the documents before the Courts, any assignment of any of the benefits of whatever was assigned; there was a mere assignment of the reversion, whereas what I am dealing with here is an assignment which goes beyond the bare reversion, and that is quite clear from both the Sale and Purchase Agreement which appears on Bll, and from the actual assignment itself which starts on B23; and on B25 appears these words: "And subject to, but with the benefit of, or existing tenancies,": What was being assigned was something more than a mere reversion: It was all the benefit of such tenancies as subsisted at the time of the assignment, that is August 1981, that is the benefit of the tenancy in this case, Bundle B at pages 1 to 10; and that must include the benefit of the protective right of Clause 2(g). In my judgment the benefits of clause 2(g), and the right to sue thereunder, were expressly assigned to the Plaintiff. And, being expressly assigned, as I have said, they come without the dicta that I have just read from the two textbooks and three authorities, but come within those words that I mentioned in the judgment of Mr. Justice Coleridge in Hunt v. Remnant, which was something more than just the estate title and interest, and it was sufficiently more to give the Plaintiff the right to sue, and I reject Miss Eu's argument to the contrary and hold, as a matter of law and as a matter of construction, and I hope as a matter of common sense, (common sense in the widest sense) that the Plaintiff has a right to sue. It would be, I add in parenthesis, a sad thing in this day and age if I had to oblige Mr. Wei now to dash upstairs, or downstairs or to another building and get a Deed of Assignment specifically relating to the right to sue under Clause 2(g), just in order properly to constitute this action. It may have been necessary in England before the middle of the last century: Admittedly, it was true in New South Wales until three years ago: But it certainly is not true now in Hong Kong, and has not been since we followed the Judicature Acts in England. 17. What then is left? That which I thought in the first place, there was only to be, but my hopes were dashed: That is the issue of relief from forfeiture. There appears to be no doubt that, in Hong Kong to-day, the law is the same as that in England. Kung Wai-ying v. The Attorney-General [1975] H.K.L.R. 1 (that is in relation to a hearing on 4th January 1974) and [1975] H.K.L.R. 429, (that is in relation to a hearing on 15th July 1974) that the principles laid down by the House of Lords in Shiloh Spinners Ltd. v. Harding [1973] A.C. 691 is the law in Hong Kong to-day, and that I am bound by the speeches in Shiloh Spinners' case. That being so, I have an unfettered discretion to grant relief from forfeiture, where I consider it appropriate, for any breach, and not just for failure to pay rent or failure to insure (as was believed to be the law in Hong Kong before the Kung Wai-ying case). Shiloh Spinners was heard in 1972 by Lords Wilberforce, Dilhorne, Pearson, Simon of Glaisedale and Kilbrandon, and the House's vote was unanimous on the particular point. Lord Wilberforce, in his speech at page 723 H, says this:-
That appears to lean in favour of my exercising my discretion in favour of the 1st Defendant. Further, I must look at the speech of Lord Simon of Glaisedale (which was specifically referred to by Mr. Justice Li, in the case to which I have just referred in the 1975 Hong Kong Law Reports), where he said, page 726, letter H:-
and Lord Simon, as one would expect from him, leant in favour of a broader and more extensively based attitude on the part of the Courts. 18. Miss Eu sought leave, and it was granted, to recall her client to give evidence of a factor that had been missing previously in his evidence, namely, whether it had over occurred to him that what he did would amount to a breach of covenant, and what he did involved in a law a breach of his duty to his landlord. He told me that he did not consider that at all, so, against the whole background of the case, I have to decide whether or not that is sufficient to justify my exercising my discretion in his favour. I have already dealt in another context with damage to the reversion, but that certainly is a factor that I have to take into account. Another factor is one urged upon me by Miss Eu that, at the beginning of the tenancy, there was a sub-tenancy, which was in favour of the 2nd Defendant, and, therefore, this breach is not as serious as it otherwise would seem to be. These were very persuasive arguments. She also asked me to look at a passage in Woodfall on Landlord and Tenant (the loose-leaf edition) Volume I at paragraph 1-1940 on page 869, and she invited my attention to this passage, "In the ordinary way relief is almost always granted to a person who makes good the breach of covenant and is able and willing to fulfil his obligations in the future.". This gentleman, the 1st Defendant, has not said anything about obligations in the future, but I apprehend he has had sufficient of a fright here to do his best either to conform with this lease in future, or at least better to conceal breaches than he did in the past. But those are not the only considerations: If one reads on at the passage in Woodfall that I just refereed to, it reads as follows:-
and there is then a quotation from Shiloh Spinners to which I will revert in one moment. 19. What Mr. Wei has urged upon me is this. Could the landlord ever again have a relationship of trust and confidence in his tenant. what he said is: "Look at the whole conduct of the 1st Defendant who has applied for the exercise of the Court's discretion. Look what he did on the occasion of the visit in July to his premises. Look at the obvious untruth that he told about the service of the Writ. Look at the bocus letters that he cooked up after the Writ had been served. Look at what he said when the amended Writ was served. There has been two years of consistent lying in this case.". And Mr. Wei urges upon me that it would be wrong of me to force his client to retain a contractual relationship with this man. And Mr. Wei urges upon me that I should not take the passages at pages 723-4 in Lord Wilberforce's speech in isolation; that I should look at them in the context of the case as a whole and particularly that I should - look at page 725 between D and F. What Lord Wilberforce said was this:-
and then he continues:-
In the speech of Lord Simon of Glaisedale, on page 727 between A and C, the learned Law Lord said:-
In order to exercise my discretion I have had to consider the whole conduct of the Defendant, the gravity in his breach, whether he was open about it or attempted to conceal it, and his conduct when he was discovered. When I say that I hold it to be a flagrant breach in contempt of his contractual obligations, I am not saying that he wilfully and with knowledge that these acts on his part would give rise to a right to re-entry in the Plaintiff, what I am saying is that he quite deliberately ignored his contractual obligations. It is an agreed fact that the lease was interpreted to him. He knew perfectly well that he could not assign, sub-let, part with possession or share. He chose to do so and, when tackled by his landlord agents, and his landlord's Solicitors, he tried to conceal that breach by pretending that the store was his, when obviously it was not. When served with a Writ he immediately embarked upon a conspiracy (because it was nothing less than a conspiracy to pervert the course of justice) which happily he did not pursue to the end, but abandoned at the door of the Court. I am of course, referring to the tow letters that I mentioned mentioned in my Judgment. 20. In my judgment it would be a wrong exercise of my discretion for me to force the landlord to have this man as his tenant from now on; it would be unconscionable and difficult. It would be in addition extremely hard on the landlord to know when it was being told the truth. Whether, for example, he was sub-letting various counters in the On Cheung Market, I know not. But, if the landlord suspected and asked, how could they possibly trust him? Why should I force them to do so? I have come to the conclusion that his behaviour to the landlord, and his behaviour to me, is so reprehensible that it would be wrong of me to exercise my discretion in his favour. Then I have to think if there is anything which would cause me to say, yes but really, on the dicta of the various Law Lords and our general principles, "You ought to be merciful. The breach has been remedied. The damage of the reversion is little. You ought to exercise your discretion in his favour.": I can find nothing in his favour, so,which ever way I look at it, I am driven to the same conclusion. This is not a case in which I can possibly exercise my discretion to grant relief against forfeiture and the counterclaim is therefore dismissed. 21. I will now hear Counsel on question of costs.
Representation:
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