Chan Hoi v. Ruby Leong

HCA003006/1972

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

NO. 3006 OF 1972

Coram: Deputy Registrar in Chambers.

Date of Judgment: 2nd February, 1973.

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DECISION

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1. In this matter the plaintiff by writ issued on 27th November, 1972 brought an action for arrears of rent and maintenance charges and to recover possession of Flat B1, 4th floor, 92, Nathan Road on the ground that the Defendant by reason of non-payment of rent and maintenance charges for five months had forfeited his right to possession of the premises.

2. The Defendant acting in person entered an appearance on the 2nd December, 1972 and filed a Defence on 18th December 1972 in which she denied that she was the tenant of the premises. The defence stated that although the Defendant had paid the rent she had done so only on behalf of a Mr. LOU Hsiao Tse. However prior to the filing of the defence the Plaintiff on 13th December 1972 sought to obtain judgement by way of an application made under 0.14 r.1. This application was supported by two affidavits one filed on 11th and one on 21st December, 1972. This application came on first on 20th December 1972 and was adjourned to 27th December, 1972. On 19th December 1972, preseumably in reply to the 0.14 application the Defendant filed on affidavit in which she again denied that she had ever been tenant of the premises. Then on 21st December, 1972 the Defendant's present solicitors filed a notice to act. There was then before the Court what seemed to be a normal 0.14 application supported by affidavit and opposed by an affidavit reply. This matter was not heard on 27th December 1972 but was, it seems at request of Defendant's solicitors, again adjourned on that date to 15th January 1973.

3. Meanwhile on 11th January, 1973 a summons was taken out by Defendant purporting to be under 0.14 r.10, asking for equitable relief against forfeiture. This was supported by an affidavit in which Defendant stated that she was Defendant in the action and in which she claimed, although she did not state it in so many words, to be tenant of the subject premises. It further stated that all arrears of rent and mesne profits had been paid by her solicitors on 5th January, 1973.

4. So when the matter came on for hearing on 15th January, 1973 there was an 0.14 r.1 application by the Plaintiff which was opposed by Defendant on the basis that she was not and never had been the tenant and there was an application for equitable relief by Defendant purporting to be brought under 0.14 r.10 on the grounds that she was the tenant and had paid the rent.

5. Mr. Young for Defendant stated that he was making no reference to the Defence. By that I presume he meant that he in no way sought to rely upon it. The existence of Defendant's affidavit of 19th December, 1972 was not adverted to by Mr. Young or by Mr. Wong who appeared for Plaintiff. It appears that Mr. Young abandons the Defence and in no way seeks to rely on affidavit of 19th December, 1972. As I understand Mr. Young's submission the Defendant after taking legal advice is satisfied to accept that she is the tenant.

6. Mr. Young suggests that payment having been made the proceedings should cease and be discontinued. In making this submission he relies upon Gill v. Lewis (1956) S. Q.B. 1.

7. He argued further that should be not succeed on the above ground the Defendant would, even if judgment were given, be entitled to equitable relief.

8. Mr. Wong for the Plaintiff argued that as there had been no tender of costs although the rent had been paid, the plaintiff was entitled to judgment on the summons. In fact Mr. Young during his submission did make a formal offer to pay a proper amount of costs to the Plaintiff. Mr. Wong further argued that the Defendant by her vacillation as to whether or not she was the tenant disentitled herself to equitable relief in that she was not seeking that relief "with clean hands". Mr. Wong relied on Gill v. Lewis and stated that the present case was one of those "exceptional cases" referred to by Jenkins, L.J. at p.13.

"In which the conduct of the tenants has been such as, in effect, to disquality them from coming to the court and claiming any relief for assistance whatsoever".

9. I will deal firstly with the propriety of bringing a summons for relief against forfeiture under 0.14 r.10. This rule gives the tenant the same right to apply for relief after judgment for possession given in a summary way under order 14 as if the judgment had been given after trial. It does not give a tenant the right to make a summary application in this regard but simply gives him the same right to apply for relief as he would have had if there had been a trial of the action. It does not in my view permit a tenant to make an application for relief by summons as has been done in the present case.

10. Gill v. Lewis dealt with relief given under section 212 of the Common Law Procedure Act of 1852. In argument before me I was addressed as though this section had application in Hong Kong. It, of course, does not. However it has been adopted in terms by Order 88A of the Rules of the Supreme Court. The argument proceeded upon the basis that S.212 (Order 88A) would be applicable to the present situation. Mr. Young asked for relief even though he had not paid the costs and Mr. Wong submitted that this would itself bar him from such relief. However in my view Order 88A does not have any application to the present situation. In Standard Pattern Ltd. Co. v. ...(illegible) (1962) 1 All E.R. 452 it was held that relief under Section 212 of the Commercial Law Procedure Act of 1852 could only be obtained where the rent was 6 months in arrears, and that the tenant had no right to a stay of further proceedings on payment or tender of arrears of rent and costs before trial where less that 6 months rent was in arrears. In the present case only 5 months' rent was an arrears so in my view Order 88A does not have any application. In the United Kingdom where the rent is less than 6 months in arrears a summary jurisdiction to give relief is given by section 46 of the Supreme Court of Judicature (Consolidation) Act of 1925. Unfortunately this provision has not been adopted in Hong Kong. It seems to me thereofre that the power to give equitable relief in relation to a forfeiture where there is less than 6 months rent in arrears is a set out in Foa 8th Edition p. 677 which citation was referred to and approved of by Hogan C.J. in Ta Sheng Plastic Goods Co. Ltd. vs. Green Island Cement Co. Ltd. 1966 in H.K. L.R. 24 at 28. The citation reads as follows.

"It was the practice in Courts of common-law to stay proceedings in an action of ejectment for non-payment of rent where the rent was brought into court pending the action; and in equity the proviso for re-entry upon non-payment of rent is regarded merely as a security for the rent and relief is granted upon payment of the arrears of rent and costs."

I have no doubt then that equitable relief can be given where a person has paid the arrears of rent and costs and that the power to do so is contained within the equitable powers of the Supreme Court. I further consider that in the present case where the full amount of arrears have been paid and where a formal offer to pay the costs has been made that on the face of it at least the defendant has an arguable case for equitable relief to be granted him. However as was pointed out by Huggins, J. in the Ta Sheng Plastic Goods Co Ltd. case :

"Apart from statute the very nature of relief requires that it should be sought by way of counterclaim rather than pleaded by way of defence. This is assumed to be the true position by Megarry on the Rent Acts (9th Ed.) 222 where he says in a footnote: "Strictly, a claim to relief should be pleaded as a counterclaim and not as part of the defence". However, this is of no practical importance in the present case because I have no doubt that if there was an arguable case for relief the proper order would have been to enter judgment on the claim for possession with a stay of execution pending determination of the counterclaim or further order."

11. I am satisfied that the correct procedure in the present case is set out in this citation of the learned judge. The defendant having abandon her defence and in no way sought to rely upon her affidavit of 19th December, 1972, I consider that the plaintiff is entitled to judgment upon his claim for possession. He is clearly not entitled to any judgment in relation to rent and maintenance charges as the defendant has paid all amounts owing in that regard up to date. The plaintiff is entitled to judgment for possession and mesne profits with costs on his summons.

12. The defendant's summons must be dismissed as I do not consider it was properly brought under Order 14 r. 10. However in accordance with the indication given by Huggins, J. as set out above, with which I respectfully agree, I order that execution of the judgment be stayed pending determination of the defendant's counter-claim for equitable relief or further order. As it appears to me necessary I will give leave to the defendant to file a counter-claim within 14 days and for the plaintiff to file a defence to the counter-claim within 14 days thereafter. It is unnecessary for me in the circumstances to rule upon the submission of the plaintiff that the defendant has not come seeking equitable relief "with clean hands", and I do not consider it would be desirable for me in the circumstances to make any observation in that regard.

13. Judgment for possession and mesne profits to plaintiff with costs.

14. Execution of judgment stayed until determination of defendant's counter-claim which must be filed within 14 days of today's date and defence of plaintiff thereto must be filed within 14 days thereafter. Stay of execution is conditional upon mesne profits of $850 being paid on first day of each month pending determination of counterclaim. Liberty to apply.

Representation:

Mr. S.C. Wong of C.C. Lee for Plaintiff.

Mr. Rowdget Young of Rowdget Young & Co. for Defendant.