Tim T.Y. Wanglee v. Choi Mei Po and Others

DCCJ006995/1980

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT VICTORIA

CIVIL JURISDICTION

ACTION NO. 6995 OF 1980

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Coram: Judge Caird in Court.

Date of Judgment: 5th September, 1981.

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JUDGMENT

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1. The plaintiff as registered owner and landlord seeks possession of premises known as 1st floor of No. 74 Chung Hom Kok Road, Repulse Bay together with a car park on the ground floor.

2. The action has been closely contested and has occupied some twelve days spread over a period of four months commencing on the 1st of April last.

3. Contractual relations between the plaintiff and the 1st defendant commenced when a tenancy agreement dated the 11th of October 1977 was entered into whereby the premises in question were let to the 1st defendant for residential purposes for a term of three years at the monthly rental of $3,000 payable in advance on the 16th day of each month.

4. Contained in the agreement was an express provision that the 1st defendant shall not "assign, transfer, underlet or otherwise part with possession of the said premises or any part thereof."

5. It was the plaintiff's case that the 1st defendand had sublet the premises in breach para. 3(j) of the tenancy agreement and the 1st defendant admitted that she had sublet the whole of the premises to the 2nd defendant.

6. The issue contested by the 1st defendant was waiver and it was common ground that the plaintiff accepted rent from the 1st defendant up to and until the 15th day of December 1979.

7. The 2nd and 3rd defendants although represented throughout the whole of the hearing took no active part in the hearing as parties, although the 3rd defendant and his wife Ngaire Elizabeth Ellen both gave evidence subpoenaed to be called by Mr. Ramanathan on behalf of the 1st defendant.

8. A survey of the personalities concerned is necessary to understand something of the background of this case. Mr. Tim WANGLEE resides in Bangkok and the Court was informed by his brother-in-law, Mr. LO Hing-bun that Mr. Wanglee is a very wealthy man, in fact considerably wealthier than he, Mr. Lo. Mr. Lo is a shareholder in and director of Ngar Mun Land Investment and Agency Co. Ltd. (hereinafter called Ngar Mun) and has his offices at the 1st floor, No. 210 Electric Road, North Point. Mr. Lo delegated much of his business activities to a Mr. Lau Kwok Chiu his secretary or rather secretary to Ngar Mun. Mr. Lau on behalf of Mr. LO Hing-bun conducted the negotiation leading to the tenancy agreement with which I am concerned. It was accepted unreservedly by Mr. Rodway on behalf of the plaintiff, that Mr. Lau was at all times acting as a properly authorized agent on behalf of LO Hing-bun and that the plaintiff is bound by anything which Mr. Lau may have done or said when on behalf of Mr. Lo he had dealings with the first defendant. It only remains as far as the plaintiff is concerned to add that Mr. Lo throughout has been acting under a proper power of attorney.

9. Mr. Tom Young, husband of CHOI Mei-po, the 1st defendant, is a real estate agent trading as far as this action is concerned under the name of Taipan Agencies Ltd. and operates something like 100 properties which he himself personally has sublet as tenant, or he in the course of his business activity has arranged the letting by another party, and in turn sublet at an enhanced rental. Mr. Young is no stranger to the Courts nor to myself and I referred both Counsel to a passage in the case of TSUI Lam-wah v. Tom Young, ⁽¹⁾ an action where Mr. Young appeared unrepresented where I said as follows:-

"In my view, the 1st defendant, Tom Young, projected as a brash confident, energetic businessman, and possibly, in the vernacular used by our cousins on the other side of the Pacific, could be regarded as a "hustler". His activities may be described as somewhat parasitical and in a social context cannot be condoned, as adding heat to an inflated rental situation. I closely observed his demeanour as well as taking cognizance of his concessions. His credibility was considerably enhanced when he responded during cross-examination, to an allegation that he had misled the landlord may "have got the impression" that he intended to reside there personally. There was no attempt to hide his company's lack of minutes, memoranda or indeed the fact that the premium of $36,000 has not yet been paid. I am of the opinion Mr. Young is a shrewd but honest businessman operating always within what he believes to be the "letter of the law", I also believe him to be possessed of his own standards of commercial morality. I consider him to be a scrupulous witness of truth and accept his evidence in all respects, particularly as to dates when he entered into this scheme and as to his intentions as to carrying out the necessary documentation pertaining to the "manoeuvre"."

10. Mr. Rodney did not object to my hearing the instant case and I did not feel that it was necessary to disqualify myself. There are issues of credibility in the instant case and I accept Mr. Rodway's submission that I must "grasp the nestle" and determine this case upon the evidence I have before me, without any preconceived acceptance of Mr. Young's integrity and credibility.

11. CHOI Mei-po was never called to give evidence. It being her case as advanced in evidence by Mr. Young that she was only acting as a "front" for Taipan. The witnesses called on behalf of the 1st defendant were Tom Young, Mr. Peter Ellen, the 3rd defendant, and Mrs. Ellen.

12. The premises, the subject of this action, are as stated earlier situate on the 1st floor of 74 Chung Hom Kok Road. On the ground floor of the same building as No. 72 there is a flat owned by Mr. LO Hing-bun's wife, the sister of the plaintiff. These premises have in addition to the ground floor a basement and a lawn to the front of the premises i.e. that part away from the road, the building coming between the lawn and Chung Hom Kok Road.

13. There is a provision in the agreement providing that "no consent to or waiver of any breach shall be binding on the landlord unless the same is in writing under the hand of the landlord". Mr. Rodway has properly advised me that he does not rely on this covernant.

14. During the course of the hearing, I prepared in draft form a chronological summary of events and gave copies to Counsel. This was elaborated upon by Mr. Rodway, and his extended version was accepted by Mr. Ramanathan and I attach the table to this judgment as Appendix A. Mr. Rodway has clearly indicated those areas where the parties are in dispute.

15. Counsel also agreed two Bundles of Documents, Bundle 'A' submitted by Mr. Rodway for the Plaintiff and Bundle 'B' by Mr. Ramanathan for the first defendant.

16. Mr. Rodway put some of the contents of an affirmation sworn by Peter Ellen to the 1st defendant. By agreement a draft of that affirmation was handed to me as a copy of the affirmation was not readily available.

17. Both Mr. and Mrs. Ellen gave evidence, Mrs. Ellen's evidence being of considerable importance as she testified to a meeting occurring late September or early October with Mr. LO Hing-bun (it was later established that it was Mr. Lo as she did not know who the person was at the time). Her credibility was not attacked by Mr. Rodway. However, he did attack her recollection as to when the meeting took place. The conversation testified to by her was accepted in every way by Mr. Lo but he when giving evidence maintained that this conversation took place around the middle of November. I might add that I accept both Mr. Ellen and Mrs. Ellen as being completely truthful and have only to concern myself as far as this issue is concerned with the accuracy of Mrs. Ellen's recall. I shall have more to say of this later.

18. Mrs. Ellen's evidence is of importance as it has been urged upon me by Mr. Ramanathan that if I were to reject Mr. Tom Young's evidence and then to accept Mrs. Ellen's evidence, then on the facts and law as applying to this case there would be a waiver. Mr. Rodway has postulated the contrary view that if I were to accept Mrs. Ellen's evidence whilst accepting his client's evidence and rejecting Mr. Young's evidence and rejecting his client as being in error as to the date of the meeting, then his client would still be entitled to judgment, giving him possession.

19. At the outset of the hearing Mr. Rodway submitted that as the 1st defendant had pleaded waiver the onus was upon him to make out his case and begin. After hearing argument I ruled that the defendant should begin. Accordingly I shall now deal with the defendant's case first. As I understand the position I do not have to determine any issues involving the 2nd and 3rd defendants at this stage but note that there may be matters consequent upon my findings which will fall to be determined later.

20. Evidence called on behalf of the 1st defendant

21. The principal witness was Tom Young, husband of the 1st defendant CHOI Mei-po and as stated earlier he was actively engaged in the real estate business particularly by letting properties and subsequently subletting such properties for a profit. He testified that he came to know Lo Hing Bun six months or a year before taking the present tenancy, and he asserted quite unequivocally that "I approached Mr. Lo about the flat". He said there was an appointment to meet Mr. Lo at the premises. That they met there at the premises which were in a neglected condition and that he "asked if any objection to subletting" because his business was taking leases renovating and subletting. Mr. Young asserted quite unequivocally that there was no objection on the part of Mr. Lo and that the market was quiet at that time. I would indicate at this stage that I accept Mr. Young's evidence as the market being quiet, at that time, By "quiet" I take this word in context with the evidence of other witnesses and accept that rentals were at a level considerably lower than as enjoyed by landlords in more recent times. Mr. Young went on to say that he decided not to proceed with the deal and asserted again that Mr. Lo was aware of the "type of operation" conducted by him. Between this meeting and October of 1977 there were no other transactions with Mr. Lo. Then he found that from his listing cards the property was available and made an appointment to visit the premises with Lo, that they met at the premises No. 74. There he went into the question of price etc. and that "he (LO) knew there would be subletting". There was discussion as to certain repairs which were necessary. Mr. Young stated that he wanted to use one of his standard tenancy agreements which did not contain any covenant against subletting, but that Mr. Lo declined because the principal wanted the lease drawn up at a solicitors' office. Mr. Lo proposed the tenancy should not be in Tai Pan's name. The reason being that the principal would probably object. Mr. Young went so far as to state that Mr. Lo said to him that "I would be able to make a lot of money from subletting.........."

22. The agreement was entered into on the 11th of November this between CHOI Mei-po and Tim T.Y. Wanglee, the plaintiff. Previously on the 6th of October a proforma confirming the arrangement had been delivered by Tai Pan to Mr. Lo. Tai Pan charged a commission and a half share of the stamp duty. On the face of it, this was an ordinary commission transaction.

23. Tai Pan then proceded to endeavour to sublet and on the 16th of November when CHOI Mei-po's tenancy began, an agreement between Tai Pan and the 3rd defendant took effect. Mr. and Mrs. Ellen subsequently moved in on the 27th of November the agreement being signed on the 28th of November. The status of Tai Pan is of interest here in that the agreement recorded the position as being "between Tai Pan Agencies Ltd. of 24 East Point Road, Hong Kong (Trustee) (Hereinafter called "The Landlord") of the one part and ....." and it is only fair to Mr. Young to note at this stage that he maintained throughout that Tai Pan was acting as trustee for CHOI Mei-po and with his present knowledge of Landlord & Tenant Law he would have worded the agreement in a different form. He explained that Tai Pan was acting as financier and banker and that all cheques were paid by Tai Pan to the landlord.

24. The next matter of significance is that on the 19th of December Tai Pan wrote to Mr. Lo with reference to plumbing problems. A letter dated the 22nd of December in reply to this was put in by the plaintiff in his agreed bundle, which letter Mr. Young maintained he never received. It is opportune to note here that the plaintiff gave evidence that Tai Pan telephoned to say the problems had been solved. It was put to Mr. Young in cross-examination that Mr. Lo's reply stating that the tenant would be contacted meant that he, Mr. Young took over resolution of the problem himself.

25. Another matter of interest arising out of the documentation is that the lease to the Ellens was for one month longer than the period for which CHOI Mei-po had leased the premises for.

26. Mr. Young was cross-examined for a considerable time and in answer to questions put by Mr. Rodway he extended the possible time upon that he had held the earlier meeting with Mr. Lo, by one year making a total of 2 years. It became clear that there were no elaborate records kept by Mr. Young as permanent records after the transaction had been completed which would show dates and places e.g. in a form of a diary entry of his having met Mr. Lo. It was put to him by Mr. Rodway that Mr. Lo had never met him, Mr. Young, before in his life. He described Mr. Lo when asked as "being very short-sighted, very thick glasses" and indicating a person present in Court "gentleman in brown suit yesterday did look a different person than I was negotiating with". The gentleman indicated a Mr. Lau, secretary to Mr. Lo's family's company and Mr. Lo present in Court was a gentleman of considerably more advanced years in appearance wearing a grey suit. Mr. Young maintained that the person that he was dealing with could have been a representative of Mr. Lo's company. It was put clearly to the witness by Mr. Rodway.

"Is that gentleman in the brown suit Mr. Lo?"

Answer "He is not".

29. I add at this stage that evidence for the plaintiff sought to establish that it was only Mr. Lo (grey suit) and Mr. Lau (brown suit) who ever became involved in transactions concerning No. 74 Chung Hom Kok Road.

30. Mr. Young was pressed to describe the premises and he gave a detailed description of the premises he had visited. It is worthy of note that this description was not challenged either by putting any errors to him in cross-examination or by calling evidence. A question did arise however, as to whether No. 72 or No. 74 was the premises visited. I, of course, must taken into account the possibility that Mr. Young had seen the premises subsequent to CHOI Mei-po agreeing to take the premises as tenant from the plaintiff.

31. It was put to the witness that.

"The gentleman in the brown suit asserted he had never seen you before yesterday". To which Mr. Young replied "seems possible". It was put to him that he had fabricated a meeting with Mr. Lo/Lau. It was clear from the evidence of Mr. Young that he had never met Mr. Lo previously. He agreed when it was put to in cross-examination that he had not met Lau. Nevertheless the description given by him as to the person he had met, corresponded with that of Lau.

32. There is a great deal of cross-examination which I don't propose to traverse in detail as to his adopting various subterfuges to conceal the subletting arrangement. This included the following question and answer:-

33. There were questions put using an affidavit by Mr. Peter Ellen filed in a High Court action, subsequently discontinued. First that.

"It was he, Young held out that he was on very friendly terms with the landlord". And to which the witness replied.

"The Ellens' landlord was CHOI Mei-po".

35. There was also a question put relating to a possible purchase of the property in question with Tai Pan acting as agent for the landlord. The witness stated that there has been a "misunderstanding". This referring to Mr. Ellen's understanding of this situation, as deposed to. The witness was pressed to explain why he didn't telephone after receiving a letter from Lo's solicitors to assort that Mr. Lo said that Mr. Young would "make a lot of money out of the subletting". The witness replied that he knew human nature very well.

36. When the witness was pressed as to his never meeting with Lo, he claimed at one stage that the name "Lau" was the same as "Lo". This was not supported by the Court Interpreter and at the time, I considered this to be of significicance. However, later during the course of Mr. Lau's evidence he Young, did refer to Mr. Lo using a different tone to which Mr. Ramanathan referred me to in his closing address. At that time, I replied that I did not recall this. Mr. Rodway, however stated that he had detected this change in tone and I found to my surprise when later reviewing my notes that I had in fact noted this at the time but failed to recollect this when counsel presented their final addresses. Accordingly, there is nothing to be held against Mr. Young in respect of this claim which is the time in vaccuo appeared to impeach his credibility.

37. The witness didn't remember personally ever doing business with Mr. Lo previously and that this was put to him that the very flat with which we were concerned was let to a Mr. Binnie from the 1st of January 1975 to the 31st of March 1977, when Tai Pan enjoyed an ordinary commission agency relationship.

38. The 2nd witness called on behalf of the 1st defendant was Peter Edington Ellen, Principal of Peter Ellen Associate, a firm of engineers/architects. He explained that he viewed the premises on November the 7th, his wife was present, also Wren Young, an employee of Tom Young was present. He assumed that necessary repairs would be carried out by the landlord and that after discussion Mr. Wren Young agreed that the repairs would be paid by the landlord. There being no reference as to who the landlord was. He explained that he thought Tai Pan was acting as Trustee for the landlord, this after the agreement had been entered into. He later when in occupancy verified Tai Pan was paying the rates.

39. The witness went on to describe his relationship with Mr. Lo, who came to his office in December and saw he, Ellen personally on Saturday, the 8th. He claimed that during a gap between Two Swire Duro (the property letting company of the Swire Group of Companies) Tenancies, that Lo and his wife (a person he assumed to be Lo's wife) had visited the premises. He explained that the name on the door of his flat "The Ellens" made it obvious they were in residence. A number of photographs were produced by agreement showing the post boxes. He testified to having a discussion with Mr. Young about a possible purchase of the premises at $1,000 per sq. foot. During cross-examination, the witness claimed that he saw solicitors on the 11th of December. He estimated that plumbing repair work for which he did not pay would have cost $6 or 7,000. There was a great deal of cross-examination as to his affidavit and he acknowledged that large portions were based on hearsay. It is of interest that he described Mrs. Lo in some detail and that there is no evidence given by Mr. Lo to show that this could not have been his wife.

40. The previous witness's wife Ngaire Elizabeth Ellen was a most important witness. She said she knew Lo Hing Bun and stated that when decoration was being effected to the downstairs flat (No. 72) Mr. Lo arrived at the door of her flat and asked if "we own the boat". This being a dingey. Upon receiving an affirmative answer he asked if this could be removed. She replied that she would have to wait until Ross (her son) arrived home from school.

41. Mrs. Ellen was a part-time secondary school teacher and arrived home at 2 p.m. every day except Tuesday and Ross arrived home early one day per week and other days by school bus after 4 p.m. She described the card with the name Ellens on it, as being a piece of card some 4 "x 2".

42. She also explained how Mr. Lo together with another man called on the 4th of December and that after this visit, she together with Ross and her husband Peter tried to pinpoint the date of the earlier conversation about the dingey. She was out of Hong Kong during July and August. Accordingly the meeting took place sometime within the "time slot" September to December the 4th and that her "best guess" was towards the end of September "adding" at this time cannot reconstruct any better. She said that she did notknow the name of the landlord.

43. The second occasion that she had met Mr. Lo was on the 4th December and I do not propose to discuss this as Mr. Lo himself accepted her account of the conversation as being accurate. She described Mr. Lo's car and the lady that she had seen him with asserting that she had seen Mr. Lo about the premises some three times.

44. It was put to Mrs. Ellen in cross-examination that Mr. Lo did not return to Hong Kong, from his visit to the United States, until the 29th of September and she then stated that the dingey incident may have occurred early in October.

45. I note at this stage that Mr. Lo when giving evidence stated that his first visit to the block was about mid October and that the dingey incident occurred between the 14th and 18th of November.

46. I should now record the dates that rents have been paid by Tai Pan as these have some significance:-

47. On the 19th of November CHOI Mei-po wrote to Mr. Wanglee at Mr. Lo's home address purporting to exercise an option for renewal contained in the tenancy agreement between her and the plaintiff.

48. The plaintiff's evidence

49. Two witnesses were called. The first LO Hing-bun, brother-in-law of the plaintiff acting under a power of attorney as attorney and agent for Tim T.Y. Wanglee, Mr. Lo was educated in the United States and qualified as a mechanical engineer and inherited an interest in Ngar Mun in 1963. He according to Mr. & Mrs. Ellen spoke fluent English and his education and background confirms this. Nevertheless he as his right, elected to give his evidence in Cantonese.

50. Mr. Rodway projected Mr. Lo as a Multimillionaire and placed considerable importance upon this. He owns a quarter share in Ngar Mun which company owns property worth some HK$100 million. The witness told me that his wife owned No. 72 Chung Hom Kok Road and he testified that he was the sole agent of his brother-in-law and that no one other than he or the secretary to Ngar Mun, Mr. Lau Kwok Chiu ever conducted dealings on behalf of the plaintiff with regard to this property. I accept his evidence in this regard. The witness described some of the history of his brother-in-law's property. He explained that Mr. Binnie leased this in 1975 through the good offices of Tai Pan. He said he had travelled to the United States of America leaving on the 28th of August 1977 and returning on the 5th of October 1977.

51. Mr. Lo explained that he had never seen Tom Young before the hearing and in view of the evidence of Mr. Young, this must be accepted. He also went on to explain that he did not allow subletting. The witness from chops on his passport, accepted by counsel on behalf of CHOI Mei-po explained that in 1979 he was in the United States of America departing from Hong Kong on the 24th of August, returning on the 29th of September. Mr. Lo said he left Mr. Lau to deal with his brother-in-law's property and to find a tenant as Mr. Binnie wished to surrender his lease. Mr. Lo frankly informed the Court that Mr. Lau knew far more about the details of his company's affairs than he did as he played a great deal of golf. The witness explained how he had a dispute with his wife as to the decoration of No. 72 Chung Hom Kok Road as he wanted to do a thorough job and that this dispute was ultimately resolved on his return from the U.S.A. when about $100,000 was spent. He first visit to the premises, he asserted, was mid October and related to the decoration.

52. The witness explained that when rents were paid by Tai Pan, receipts were prepared by Mr. Lau which he personally signed.

53. He described the "dingey" incident. This he said occurred after a conversation with his wife, there having been earlier a complaint from workers. The decoration commenced in the middle of October and that the incident occurred some 10 to 14 days prior to the 28th of November. It was common ground that Mr. Lo's Solicitors opened his file on the 28th November when he first saw Mr. Lo. He had called at the Ellen's flat and spoke to a European woman. There is no need to detail this conversation as he confirmed Mrs. Ellen's account. The only issue in dispute being whether Mrs. Ellen was correct in her recall as to when the conversation occurred or whether LO Hing-bun was correct. It is of interest that he was asked whether he had seen Mrs. Ellen before he received a payment of rent on the 19th November and his reply was "could be that I had seen Mrs. Ellen."

54. The witness explained that no inspection of any properties was made unless complaints were made when rent was collected. The gravamen of this evidence as put by the defence being particularly insofar as No. 74 Chung Hom Kok Road is concerned that he was only interested in the collection of rent.

55. Cross-examination was conducted at length and he agreed that in 1977 the property market was not good and asserted that he did not know subletting was common. This from a property magnate. He did not conduct a thorough check on prospective tenants and he did not know whether Lau had placed the Chung Hom Kok property with Tai Pan Agencies Ltd. and he was not interested enough to find out. There was no investigation of CHOI Mei-po's background other than to find out she was a married woman and he agreed that Tai Pan's cheques were sent to him for payment of rent.

56. With regard to the dingey incident he was pressed as to how he knew that the tenant did not speak Cantonese. To which he replied that the contractor thought the whole of the building was let to Europeans. It appears to me that if this was so when he knew that CHOI Mei-po were a tenant, this was an oddity which should have put him upon enquiry. He said that after he had returned to his office after seeing Mrs. Ellen, he thought about the status of CHOI Mei-po. He had seen the name plate during his visit and on getting back to his office he thought that CHOI Mei-po may have married a European and that Mrs. Ellen whom he saw at the door was a guest. In observing his demeanour during this aspect of his cross-examination, I formed the view he was being evasive. He produced as another reason that the flat may have been left to someone else as a leave flat and in answer to a question from the bench as whether to letting a flat during leave constituted a breach of covenant. He replied "I did not feel it was in breach of contract and therefore I had to make sure".

57. It appeared to me this form of subletting was acceptable to the witness and is perhaps indicative of his state of mind.

58. He was pressed as to the distinction between protected and unprotected tenancies and replied that he would have to take legal advice.

59. He accepted that there was a letter dated the 19th of November from CHOI Mei-po purporting to exercise the option and asserted this had nothing to do with his visit to "Lawyer Lee" "They were co-incidental" that is the receipt of the letter and his version of the "dingey" incident.

60. Mr. Lau Kwok Chiu was called on behalf of the plaintiff. He explained how the Binnie transaction was conducted in 1975 through Wren Young, and also how the tenancy was surrendered, that Binnie departed on October the 1st of 1977, a notice was put up on Sunday the 2nd of October and on the 4th a Miss Chow of Tai Pan telephoned wanting to inspect. That as a result of this he was driven to Chung Hom Kok by Wren Young. His description of Wren Young was extremely vague. He said that after Wren Young had introduced himself he recollected that this was the man he had dealt with previously when the Binnie tenancy was originally negotiated. He claimed that he had never seen Tom Young prior to the commencement of the case. He denied there was any discussion as to a letting to Tai Pan and expressed his view that Tai Pan was an agency in business to introduce people to purchase and to let. He claimed that the letter of 19th of December after being received was replied to on the 22nd, that he had typed that letter which was signed by Mr. Lo, and after a few days Tai Pan telephoned to say the problem had been solved and also that Tai Pan claimed to be acting as agent for CHOI Mei-po.

61. In chief the witness went on to say that he went with Lo to No. 74 on the 4th of December and he confirmed the only enquiry about CHOI Mei-po's status was whether she was a married woman.

62. He went on to testify that after Lo had visited the flat in November 1979 and upon his return he asked - Could CHOI Mei-po have married a European? He was adamant that this took place at the end of November and in cross-examination elaborated on this saying that he went to Macau on the 26th to 27th of November and the conversation had taken place before that trip. It was put to him later during cross-examination that it was early October and he maintained that he had not been mistaken.

63. When put to him whether subletting was a common practice, he said that yes, normally only in subletting of cubicles but that this type of case did not take place often. During cross-examination he claimed that there was nothing surprising about the appearance of Wren Young, he being unable to furnish any adequate decaiption of this person. It was put to him, that Wren Young had a bald head to which he replied "I did not pay attention". He was unable to remember whether Wren Young had a full head of hair or was bald.

64. He said in relation to the cheques for rent being received from Tai Pan, answer "Felt somewhat different, CHOI Mei-po should be one to pay rent". Then "ever come across a situation of a tenant using an agency". Answer "No". Then "If tenant using Tai Pan have to pay fees". Answer "I don't know about that". This does seem ingenuous from someone who had been engaged in the property business for over 20 years. The witness in contradiction to Mr. Lo asserted that at 1977 the property market was "pretty good", In re-examination he agreed with Mr. Rodway that his eyesight was very bad, he could not remember whether Wren Young was bald or not, also that Wren Young appeared to be Chinese whereas Tom Young "appears to me as an Indian". My view was that Mr. Tom Young appeared to be Chinese, and that Mr. Lau was embelishing his evidence somewhat in this regard.

65. The Law as to Waiver

66. It is a question of fact whether the money tendered by Tai Pan to LO Hing-bun as agent for the plaintiff was tendered as rent and accepted as such. As distinct, for example, for money tendered and accepted as damages for trespass.

"Once it is decided as a fact that the money was tendered and accepted as rent the question of its consequences as a waiver is a matter of law". Windmill Investments (London) Ltd. v. Milano Restaurant Ltd.⁽¹⁾

67. I accept Mr. Rodway's submission and hold following cases cited by him that.

"Mere knowledge and acquiescence in an act constituting a forfeiture does not amount to a waiver. There must be some act affirming the tenancy". Doe on The Demise of Shephard v. Allen.⁽²⁾

68. A useful analysis of early authorities is contained in David Blackston Ltd. & Another v. Burnetts (West End) Ltd. & Another.⁽³⁾

"..... in forfeiture cases the consequences of an action relied on as a waiver are a matter of law and not of actual intention and that is irrelevant quo animo such an act is done. It is also clear from the last mentioned case (Central Estates (Belgravia) Ltd. v. Woolgar (No. 2))⁽⁴⁾ that a principle is affected by the knowledge of his agent and that he cannot escape the consequences of an act done, by one agent by saying it was not that agent but another that had the actual knowledge."

Mr. Rodway accepted that the plaintiff is bound by the acts of both Mr. Lo Hing Bun and Mr. Lau Kwok Chiu.

69. It is of interest that in Blackston v. Burnetts the fact issue was demand for future rent. (a) such a demand having been issued, was this made with knowledge of a breach which entitled the landlord to forfeit? Was that sufficient to constitute an election to continue the lease and therefore constituting a waiver? (b) if so what knowledge is necessary? The question of fact was did an agent have such knowledge at the relevant time?

70. Of course, the cases establish that not only a demand for rent, provided the demand is absolute and unqualified, but acceptance of rent accruing due after the forfeiture.

"Such an acceptance operates as a matter of law to waive all forfeitures. Then known to the lessor". Woodfall. ⁽⁵⁾

71. The views of Swanwick J. as to knowledge expressed at page 793 in Blackston v. Burnetts are of interest.

"..... for there to be a valid election to waive a breach the landlord or his agent must have sufficient knowledge of the breach before despatching the document making the election, but that such election does not become effective until it is communicated to the tenant".

And again at page 795 (c)

"In my judgment again without the guidance of any direct authority the knowledge required to put and let a landlord to his election is knowledge of the basic facts that in law constitute a breach of covenant entitling him to forfeit the lease. Once he or his agent knows these facts, an appropriate act by himself or any agent will in law effect a waiver or forfeiture. His knowledge or ignorance of the law is in my judgment irrelevant. If it there not so a vast gap would be open in the administration of the law of landlord and tenant and a facile escape route for landlords would be provided. Indeed if this was the position unscrupulous landlords could hardly have failed in the past to take advantage of it long before now".

72. On the authorities I accept that the onus rest upon a leasee to adduce some evidence of the lessor's knowledge and proof of an act showing recognition of the tenancy does not throw the onus of proving want of knowledge on the lessor. Matthews v. Smallwood⁽⁶⁾ approved of by the Privy Council in Fullers Theatre & Vaudeuille Co. Ltd. v. Rofe ⁽⁷⁾.

73. On reviewing the authorities it falls for me to determine in my judgment to determine whether Lo Hing Bun and Lau Kwok Chiu either individually or in concert, as agents for Tim T.Y. Wanglee have had knowledge of facts sufficient to give rise to the landlord's right to re-enter and that notwithstanding such knowledge they have elected to permit the lease to continue.

74. Tai Pan Agencies Ltd. as "Trustee". The agreement between Choi Mei Po and Peter Alen & Associates Ltd. shows on the face of it that Tai Pan is a Trustee. There is no instrument creating a trust nor is there any formal written declaration of trust. In so far as Tai Pan's relations with the landlord are concerned, even if Mr. Young's evidence were to be accepted, the description is misleading. I say, if Mr. Young's evidence were to be accepted, that CHOI Mei-po was acting as a "front" for Tai Pan.

75. In so far as relations between CHOI Mei-po and Tai Pan are concerned, again if accepting those aspects of Mr. Young's evidence relating to this relationship a more correct description would be Tai Pan as agent for an undisclosed principal. Mr. Young frankly admitted that with his present knowledge of the law he would not have used the terminology "trustee".

76. Throughout the agreement the term landlord is used in relation to Tai Pan or rather whoever it is Tai Pan purports to be trustee of Mr. Young has asserted that Tai Pan acted as trustee for CHOI Mei-po. If this evidence were to be accepted there is a misdescription in theusage of the word landlord. Mr. Young is fully conversant with the landlord & Tenant (Consolidation) Ordinance, Cap. 7 and must be aware of the terminology used therein "Landlord", "Tenant", "Principal Tenant" and "Sub-Tenant".

FOR CONSIDERATION. The following are some matters arising from the evidence of the parties must be taken into account:-

CONCLUSIONS:

77. As stated carlier the evidence of Mrs. Ellen is not in dispute as to what was said in conversation with Mr. LO Hing-bun. The question being. When did the dingey incident take place? I accept Mrs. Ellen's evidence and believe this occurred sometime early in October and reject the evidence of Mr. Lo, supported by Mr. Lau that this occurred in November. In my view, Mr. Lo and his employee lied about the date of this incident. This of course is a factor which I may take into account when assessing their credibility on other issues.

78. I do not accept Mr. Lo's evidence that the letter purporting to exercise the option dated the 19th of November did not prompt him into endeavouring into improve his brother-in-law's situation with regard to rental income. It is my belief that this letter in conjunction with the upsurge of the property market tended to act as a trigger. I would add that the parties had agreed that a fair market rental at the time of trial was approximately $9,000 per month.

79. Further Mr. Lo projected as being evasive when he maintained during questioning that Mrs. Ellen was a guest.

80. Mr. Tom Young has failed to establish to my satisfaction on the balance of probabilities that there was a conversation with Mr. Lo/Lau or a Mr. X representing Mr. Lo whereby it was expressly agreed that he should sublet the suit premises and make a lot of money therefrom. This finding is partly because he eliminated Mr. Lau as being the person he dealt with. He did not try to identify and implicate Mr. Lau, present in court and answering to a description earlier given by him of the representative of the landlord whom he claimed he had negotiated with. Moreover it appears unlikely that a professional property manager would agree to such a transaction subletting if a "lot of money" were contemplated as being the probable outcome. I specifically reject Mr. Young's evidence as to the statement as to making money being made.

81. It is for the 1st defendant to prove the alleged waiver on the part of the plaintiff landlord.

82. I deal first with events prior to Mr. Lo's return to Hong Kong, from the U.S.A. in September in 1979. Mr. Tom Young provided virtually all the evidence and an aspect of his evidence was capable of corroboration by the issue of receipts to Tai Pan by Mr. Lo.

83. Although both Mr. Lo and Mr. Lau fell far short of convincing me that they were telling the truth throughout their evidence, I did accept their evidence with regard to the letters of the 19th and 22nd December 1977.

84. I am left with Mr. Young's evidence. He impressed me in many respects but (a) His credibility was impeached slightly by Mr. Ellen.

(b) He took active steps to conceal the existence of the subtenancy from the landlords and the existence of Mr. Lo from Mr. and Mrs. Ellen.

85. I have borne in mind the issue of the receipts but nevertheless have come to the conclusion that the 1st defendant through Mr. Young has failed to establish to my satisfaction on the balance of probabilities that Mr. Lo or his agent Mr. Lau had knowledge of the subletting to the 2nd defendant, and the use of the premises as a residence by Mr. and Mrs. Ellen.

86. I turn now to events occurring from the end of September 1977 onwards. I believe as stated earlier, that the dingey incident occurred in early October also that the events surrounding the incident were such that Mr. Lo was fully aware that the Ellens were in residence and that he could not reasonably have come to any other conclusion. I reject his assertions (a) that Mrs. Ellen was a guest and (b) that he thought there may have been a letting of the flat as a "leave flat".

87. The experience of meeting Mrs. Ellen added to his issue of receipts to Tai Pan, the advice from the contractor, and it being clear that a son of a European lady obviously in residence was attending school in Hong Kong and that such son was responsible for a dingey stored outside the building constituted clear knowledge of the act constituting a forfeiture, namely subletting. The acceptance of rent on the 16th of October and the 19th of November clear acts affirming the tenancy.

88. In my judgment the acceptance of the two payments of rent, even if there had been no knowledge prior to Mr. Lo's visitation to the premises and meeting with Mrs. Ellen was an act affirming the tenancy and operated as a matter of law to waive the forfeiture due to subletting.

89. The Plaintiff is bound by anything which Mr. Lau may have done as asserted on behalf of the 1st defendant and only remains to add that Mr. Lo throughout acted as a properly authorised agent.

90. The 1st defendant is entitled to judgment and the plaintiff's claim for possession is dismissed. I shall hear the parties as to costs and any other ancilliary matters.

Representation:

Mr. Rodway inst'd by C.C. Lee & Co. for plaintiff.

Mr. Ramanathan inst'd by H.A. Hoosenally & Co. for 1st defendant & 1st and 2nd Third Party

Mr. Wally Yeung inst'd by Robertson, Double & Boase & Co. for 2nd & 3rd defendants.

(1) V.C.J. Action No. 5283 of 1980

(1) 1962 3 WLR 651 @ 654

(2) 3 Taunt 78

(3) 1973 3 ALL E.R. 782 @789

(4) 1972 3 ALL E.R. 610

(4) Landlord & Tenant 13th Edition Vol. 1 P.40

(6) 1910 1 CH 777

(7) 1923 A.C. 435