Lee Chung Industrial Co Ltd v. Leung Ping t/a Sun Wing Wah Iron Foundry

DCCJ001517/1970

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT VICTORIA

CIVIL JURISDICTION

ACTION NO. 1517 OF 1970.

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Coram: N.B. Hooper, District Judge

Date of Judgment: 19 August 1970

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REASONS FOR JUDGMENT

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1. The plaintiff company is the registered owner of the property registered in the District Office at Taipo as Section A of Lot No.173 in Demarcation District No. 187, and is applying for an order for ejectment of the defendant from a portion of that property. The plaintiff company have also included in their Particulars of Claim an item for damages for trespass, which they ask should be limited to $5000, but at the hearing they did not press for damages.

2. There can be no doubt that the plaintiff company became the registered owner of these premises in 1966, when it purchased them from the previous registered owner Mr. Choi Wai Kwan for HK$40,000. The conveyance of this property was duly executed on the 2nd of November, 1966, which conveyance was registered at the Office of the Assistant Land Officer in Taipo, New Territories, on the 12th day of December, 1966. It would appear on the face of this conveyance that the land was subject to no encumbrances.

3. The defendant claims that he is a tenant of the premises occupied by him on the plaintiff company's property, and that his tenancy goes back to 1963. He maintains that he rented this land from a previous registered owner Mr. Ng Bo Kwan. It was suggested during the hearing that this Mr. Ng was one of the previous owners of the land, and that it was subsequently purchased from him by suction by a Mr. Choi, who in turn sold it to the plaintiff company in 1966.

4. The plaintiffs have called only one witness to substantiate their claim. This witness was Mr. Kapor Yang, the plaintiff company's Assistant Manager. He has admitted during his evidence that he visited the property both before and after the sale, and on both occasions he noticed that there was a stone hut and a few cottages on the premises, though he admitted further under cross-examination that he did not know whether they were on Crown Land or not. He admitted that he did not know who the cottages belonged to despite enquiries, and that he did not know how the previous owner Mr. Choi had acquired the land. It would appear that he was quite unable, from his own knowledge, to indicate exactly what part of the land in question the defendant was occupying at that time, or in fact whether the defendant was occupying the property at all. There is no evidence that the plaintiff company had notice of any tenancy held by the defendant at the time they acquired this land. No rent has ever been collected by the plaintiff company and Mr. Yang said that he instructed his architect to prepare a plan of this piece of property concerned showing the place where the defendant was trespassing, and this plan was identified by him as Ex.P4. It is significant that this plan was dated April 1969, several years after the plaintiff company acquired this land. This plan was admitted as an exhibit without the architect being called to verify its accuracy, when the Defence consented to its admission. There was no evidence as to where the architect got the information that the defendant was occupying the portion marked in red.

5. The defendant has testified in the witness box that he rented this land and the broken cottage from this man Ng Bo Kwan at a yearly rental of $500 in 1963. He was introduced to his landlord Ng by the landlord's younger brother Ng Bo Wud, who he has called as his witness. He claimed that although the rent originally agreed was $500, because of a run on the banks in 1964, and because business was not good at that time, he persuaded the landlord to reduce the rent to $180 per year. He said that it was agreed that there should be a deposit of $600. He claimed to have paid rent right up to the present year, and to have been issued with receipts in respect of that rent. He has produced in Court the receipt for the deposit of $600 (Ex.D1) which purports to be signed by one Mok Pak Oi and also one rent receipt dated the 12th of February 1969 (Ex.D2) purporting to be signed by this man Ng Bo Kwan. He claims that all the other receipts were lost in 1968 when they were carried away by rain water. He has explained that the reason why the name appearing on Ex.D1, the deposit receipt, is Mok Pak Oi, and not that of the landlord, was because Mok Pak Oi was the sister-in-law of the landlord, and that the landlord had informed the defendant that the receipts in future would be issued in his sister-in-law's name. He has testified that the lost receipts also bore the same name. There has been also a lot of confusion about the extent of the land occupied by the defendant, and covered by this alleged lease. The deposit receipt Ex. D1 refers to "a wooden house No. T/95 in No.28 Day Lung Hau, Hin Tin Village, Shatin," the rent receipt Ex.D2 merely refers to "the premises of No. 28, Day Lung Hau under the Lot Numbers of Hin Tin Village, Shatin". The defendant has given evidence that the rent was in respect of land and the broken cottage. And later in his evidence at page 45 he said that he agreed to rent the whole of the piece of land marked in red. The defence witness Ng Bo Wud (D.W.2) was called to testify that he introduced the defendant to his elder brother Ng Bo Kwan, but he was not able to say precisely what was the area which was rented by the defendant. He confirmed however that he himself had occupied this stone house and had been a tenant of his brother Ng Bo Kwan, and that he had been paid a sum of $12,000 as compensation from the plaintiff company for his vacating these premises.

6. The proof of the defendant's tenancy is therefore not without difficulties and it would appear that the terms of the alleged lease were never drawn up in any deed or other formal document.

7. The position therefore would appear to be that when the plaintiff company purchased this land in 1966, they had no notice of any tenancy by the defendant and could not be sure that their land was occupied by the defendant until the architect's plan was prepared in 1969.

8. It would appear that the rights of the parties are governed by the Land Registration Ordinance Cap. 128 of the Laws of Hong Kong. Section 3 of that Ordinance provides as follows :-

9. These sections were considered by the Full Court in the case of Kwok Siu Lau v. Kan Yang Che.⁽¹⁾ It was held that the effect of Sections 3 and 4 of the Land Registration Ordinance of 1844, in the absence of fraud, is to make an unregistered deed null and void as against the registered deed of a subsequent bona fide purchaser for value, even though the latter had, at the time of registration, notice of the former unregistered deed. This judgment was cited in Civil Appeal No.2 of 1965 in the Full Court which is reported in the 1965 Hong Kong Law Reports at page 87. The facts in that case were very similar to the facts in the present case before me except that if anything the tenant in the case before the Full Court was in a rather stronger position in that the terms of his lease had in fact been reduced into writing, and also there was some evidence to the effect that the registered owner had notice of the lease at the time when he purchased the property. Nevertheless the judgment in the previous case quoted was followed and it was held that a person claiming under a registered deed is not affected by notice of a prior unregistered instrument unless his conduct amounted to actual fraud.

10. There has been no evidence of any fraud in this case, and it would appear, therefore, that so far as the defendant's tenancy or lease is concerned it is null and void as against the claims of the registered owner, i.e. the plaintiff company. The defendant's action in remaining on the property after he received the letter dated the 16th of October 1969 from the plaintiff's solicitors (Ex.P3) was clearly unlawful, and I am satisfied that the plaintiff company is entitled to an order for ejectment. I would therefore give judgment for the plaintiff on item (a) of his claim and also costs, but will make no order in respect of his claim for damages, as it would appear that the plaintiff has dropped this item of his claim.

Representation:

Mr. Chan of Messrs. C.P. Lin & Co. for the Plaintiff.

Mr. Chow of Messrs. T.M. Chow & Co. for the Defendant.

Judgment Read In Court.

(1) (1913) Vol.8 H.K.L.R. page 52