Gold Jubilee Estates Co Ltd v. Chung Chun Yung and Others
Read the full judgment text of HCA 3121/1972 on BabelCite. This High Court CFI judgment.
1. This is an application by three applicants to set aside a judgment dated the 9th January 1973 for possession of the basement, Honour House, 375-381, Nathan Road, Kowloon and to be added as defendants in this action.
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HCA003121/1972
IN THE SUPREME COURT OF HONG KONG ORIGINAL JURISDICTION -----------------
----------------- Coram: Mr. Registrar Jones in Chambers. Date of Judgment: 12th March, 1973. ----------------- DECISION ----------------- 1. This is an application by three applicants to set aside a judgment dated the 9th January 1973 for possession of the basement, Honour House, 375-381, Nathan Road, Kowloon and to be added as defendants in this action. 2. The plaintiff is the registered owner of the premises which were let to the defendant for business purposes under a tenancy agreement dated the 24th August 1970 for a term of five years, commencing from the 1st June, 1970 at a monthly rental of $6,800. The premises in breach of the agreement were used by the defendant as a common gaming house. A writ was served personally on the defendant on the 18th December 1972 and a copy of the writ was posted at the premises on the same date. No appearance was entered to the proceedings by the defendant and judgment in default of appearance was obtained on the 9th January 1973. An order giving leave to issue a writ of possession was made on the 15th January 1973, a copy of the judgment having been posted at the premises for three consecutive days on the 10th, 11th and 12th January 1973. A writ of possession was issued on the 16th January 1973. An order was made in favour of the applicants on the 17th January 1973 for leave to issue a summons to set aside the judgment and a stay of execution granted until the date of the hearing. 3. Each of the applicants is respectively the sole proprietor of businesses carried on in the basement under the names of Fiat Refreshing Parlour, China (Candle) Company and New Kam Juen Music House. The 1st applicant claims that he has been in possession as a sub-tenant since the 19th May 1971 having been granted a tenancy agreement by the defendant for three years at a monthly rent of $3,800. The 2nd applicant claims that she has been in possession of her portion since the 1st February 1972 at a monthly rent of $4,000. The 3rd applicant says he has been a sub-tenant of the defendant since the 1st November 1972 at a monthly rent of $7,500. All the applicants claim that they first became aware of the proceedings when a copy of the judgment was posted. The applicants have applied in the alternative for relief against forfeiture or for a stay of execution for a period of twelve months in view of the amounts expended by them upon equipment used in their businesses. 4. The plaintiff denies that he had knowledge of the alleged sub leases until the present summons was issued and denies that he gave his consent to the defendant to sub-let as required by clause 2(u) in the agreement between the plaintiff and defendant. 5. The applicants contend that a Mr. Kwok acted as the agent for the plaintiff in collecting rents but this is denied by the plaintiff who maintains that Mr. Kwok was the caretaker and employee of the owners and occupants of the other units in the building and was only concerned in collecting maintenance fees for the running of the building. Although the applicants contend Mr. Kwok collected rents no receipts were produced. Upon the affidavits before me there is no evidence to show that the plaintiff authorised the sub-leases to the applicants nor in my opinion does the question of waiver arise for even if the plaintiff was aware of the position which I do not accept the applicants cannot benefit from the defendant's illegal user of the premises. 6. In the alternative Mr. Asome submits for the applicants that they are entitled to relief against forfeiture. It is clear that except in the case of non payment of rent and failure to insure and in some cases of accident, fraud, mistake or surprise there can be no relief against forfeiture other than provided for by statute. Mr. Asome cited various authorities in support of his argument including the Court of Appeal decision of Shiloh Spinners Ltd. v. Harding 1971 2 All E.R. at page 307. However this case has since been reversed by the House of Lords and is reported in Part 2 of the Weekly Law Reports 1973 at page 28. At page 38 Lord Wilberforce said: 'it remains true today that equity expects men to carry out their bargains and will not let them buy their way out by uncovenanted payment. But it is consistent with these principles that we should reaffirm the right of courts of equity in appropriate and limited cases to relieve against forfeiture for breach of covenant or condition where the primary object of the bargain is to secure a stated result which can effectively be attained when the matter comes before the court, and where the forfeiture provision is added by way of security for the production of that result. The word "appropriate" involves consideration of the conduct of the applicant for relief, in particular whether his default was wilful, of the gravity of the breaches, and of the disparity between the value of the property of which forfeiture is claimed as compared with the damages caused by the breach.' Further at page 39 Lord Wilberforce said:
7. In the present case there was a wilful breach by the defendant in using the premises for an illegal purpose which on the principles enunciated in Shiloh Spinners Ltd. v. Harding would not enable relief to be granted against forfeiture so that it is abundantly clear that the applicants' application on this ground must fail. 8. The applicants as a further alternative have asked for a stay of execution for twelve months. This period is too long but the plaintiff is prepared to agree to a stay of execution for a period of two months which I consider to be reasonable. Accordingly the applicants' summons will be dismissed with costs to the plaintiff and a certificate for counsel. There will be a stay of execution for possession for two months. 9. Dated this the 12th day of March, 1973.
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