Tang Fong Chuen v. Tang Chi Kin

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

ACTION NO. 1 of 1946.

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Coram: H.W.B. Blackall, CJ

Date of Judgment: 2nd July 1947

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Ruling on Plaintiff's submission that he has no case to answer.

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1. In this case the Court held that the onus lay on the defendant to begin. At the conclusion of the evidence adduced by him, it was submitted on behalf of the defendant

(1) that there was a duty cast upon the plaintiff to notify the defendant that the document purporting to transfer the house at St. Stephen's Lane was a forgery and, since his failure to do so resulted in a loss to the defendant, the Plaintiff is estopped from denying the forgery.

(2) that as the plaintiff stood by and permitted the defendant to improve his property the defendant is entitled to the kind of right he believed he had, subject to a possible exercise of discretion by the Court.

(3) that even if the plaintiff did not know that improvements were being carried out on his property the defendant is nevertheless entitled to reasonable compensation in respect of same.

2. Objection was taken by Mr. D'Almada to head (3) on the ground that it had not been pleaded. The Court upheld this objection but, in any event, I would have held in favour of the plaintiff as I do not consider that the cases cited by Mr. Bernacchi support his argument: indeed one of them (the Earl of Oxford's case) is referred to in 13 Hailsham (p.497) as an illustration of standing by with knowledge. As to heads (1) and (2), Mr. D'Almada submitted that the plaintiff has no case to answer.

3. As regards submission (1), it is common ground that the plaintiff had no knowledge of the sale of the property until after it had taken place, so could not have notified the defendant in time to prevent his paying over the purchase money. It is contended, however, that in consequence of the plaintiff's failure to notify the defendant, the latter continued to expend money on the property. A somewhat similar point was taken in case O.J. 2/46, Ip Yan Shi and Ip Kwan Chik v. Ip Ming in which numerous decisions were cited so it is unnecessary to refer to them here. It will suffice to say that estoppel can arise in this class of case only where such a relationship exists between the parties as to cast upon one of them a duty to disclose to the other e.g. that of banker and customer (Greenwood v. Martins Bank 1931 C.A. 371), and as no such relationship exists in the present case, I consider the plaintiff has no case to answer under head (1).

4. Coming to submission (2), it was conceded by Mr. D'Almada that if the plaintiff knowingly stood by and allowed the defendant to expend money upon the improvement of the plaintiff's property, the defendant would be entitled to equitable relief. He submitted, however, that it is for the defendant to prove this and that the defendant's evidence has done no more than to raise a mere conjecture. This being so, there is no case for the plaintiff to answer.

5. I have therefore to consider the evidence upon this point and see whether it is sufficient to shift the burden of proof or is, as Mr. D'Almada contends, a mere scintilla. Now, the witness Lo Shak Tsang (the plaintiff's brother-in-law) stated that in December, 1945, he received certain news about the property in question which he reported to his brother-in-law on his return to Canton. Following this, the plaintiff came to Hong Kong in January, 1946, and had an interview with Lai Nock who admitted he had sold the plaintiff's house in St. Stephen's Lane, and it is agreed by counsel that the purchaser's name became known to the plaintiff's solicitors the same month. It was also given in evidence that Lai Nock showed Lo Shak Tsang the Japanese deed relating to the sale of the property, which deed contains the name and address of the purchaser, who resides in Hong Kong. Now, the purchaser appears to be a person of substance, at any rate he is not a mere will-o'-the-wisp, so the Plaintiff should have experienced no difficulty in getting in touch with him if he wished to do so. But instead of this, he took no action until late in March, 1946, and then only because of the receipt by his solicitor of a letter from the defendant's solicitor notifying him of the fact that the defendant had acquired the property during the Japanese occupation.

6. As the defendant gave evidence that he expended about $47000 on reconstructing and improving the house, and reckoned that about 60% was spent in 1946, his counsel submits that the natural inference to be drawn, in the absence of any explanation to the contrary, is that the plaintiff knowingly stood by. Mr. D'Almada, on the other hand, contends that the onus lies on the defence to prove that the plaintiff had visited or at least been seen in the neighbourhood of the house and that the plaintiff's inaction is sufficiently explained by the fact that the Civil Courts were not open at that time. I am not impressed by these reasons. As to the first, the question whether the plaintiff knew that repairs were being effected at St. Stephen's Lane is one which could be easily answered by him as the facts lie peculiarly within his knowledge. And as to the second, the fact that the Courts were not then functioning would not preclude his informing the defendant that the property belonged to him (the plaintiff) and requesting him to give it up. Neither would it prevent him visiting his own house.

7. In Hibbs v. Ross (1 Q.B.D. 534) the question arose whether a ship was in the possession of the defendant. The only evidence adduced by the plaintiff about this was the ship's register which gave the defendant as registered owner. It was admitted that this was by no means conclusive evidence of possession but Blackburn J. nevertheless held that as any facts to the contrary could easily be proved by the defendant, a jury would be fully warranted in acting on the prima facie inference that the persons having the custody of the ship were employed by the owners unless some evidence to the contrary were given.

8. Applying this principle to the present case, it seems to me that following his interview with Lai Nock, one would expect the plaintiff to have either inspected St. Stephen's Lane himself or to have deputed someone else to do so, and that he would not have allowed several months to elapse before getting in touch with the defendant. His reason for taking no action ever this period is one so entirely within the plaintiff's knowledge and so easily given by him that I think a Court would, in the absence of any explanation to the contrary, be entitled to draw the inference that the plaintiff deliberately stood by. I hold therefore that a prima facie case has been established by the defendant under this head to this extent; that the onus rests upon the plaintiff to explain why he had no knowledge of the fact that repairs were being effected during the period subsequent to his becoming aware of the defendant's identity.