Chan Pao King v. Siu Kam Lin

HCA003506/1973

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

ACTION NO. 3506 OF 1973

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Coram: Trainor, J.

Date of Judgment: 14th March, 1974.

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JUDGMENT

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1. The plaintiff is the registered owner of the premises known as Apartment J on the 4th floor of Lap Hing Building on Hennessy Road. On or about 9th December, 1971 the plaintiff let the premises to the defendant on a monthly tenancy at the monthly rent of $500. The tenancy was in writing and it was a condition that the tenant would not assign or sublet the premises without the consent of the landlord, and in the event of the breach or non-compliance of that covenant the landlord would be entitled to re-enter. It was the claim of the plaintiff that the defendant, in breach of that covenant, sublet the premises in October, 1973 without the plaintiff's consent and thereby incurred a forfeiture of the tenancy.

2. In her Defence the defendant admitted the subletting of the premises as alleged but pleaded that it was done with the knowledge and consent of the plaintiff, and that the rent for the months of October and November had been paid to and accepted by the plaintiff. She pleaded that for that reason the plaintiff was not entitled to claim forfeiture and asked that the case be dismissed.

3. Briefly the facts are as follows:

4. From the commencement of the tenancy the plaintiff never again saw the tenant. Rent was paid to her son and delivered by him to the plaintiff. He saw his mother daily and when a cheque or a payment for rent was received from the defendant he handed it over. It would appear from his evidence that he also kept her informed of anything that was taking place on the premises. It was he who discovered that in the month of October a young lady was in occupation of part of the premises, the subject of the tenancy between his mother and the defendant. He approached this lady who admitted that she was the sub-tenant of the defendant. She gave him a receipt for rent that she had paid and on which was endorsed a receipt for a deposit. Both documents being dated 21st October, 1973. The receipt for rent also purported to set out the terms of the tenancy one of which was that the rent would be paid in advance. From this it may be concluded that the rent was in respect of the month of October/November. The tenancy commenced on 20th October.

5. In his evidence the son said that he informed his mother of what he had discovered and the following day he approached the defendant and told her that she was in breach of the covenant against subletting and told her that she must move out.

6. In his evidence he also referred to another incident of subletting as a result of which he objected to a sub-tenant. Although it would appear from his evidence, and that of the defendant, that his objection was a personal one. I concluded, and I find as a fact, that the son was the agent of his mother, the plaintiff.

7. The defendant in her evidence said that since she went into occupation of these premises she had on many occasions sublet part of them. She said she had done this with the knowledge of the plaintiff's son. The son in his evidence admitted that he was aware that there were, on more than one occasion, persons in occupation of part of the premises, some of them for as long as two months, but he denied that he was aware that these persons were present by reason of a subletting. I was satisfied from the evidence of the defendant and the cross-examination of the son that he was fully aware that the occupation by the persons that he saw was in fact by reason of a subletting. I am also perfectly satisfied that knowledge of the subletting. could be attributed to his mother. In those circumstances I am satisfied that such breaches of the covenant as took place with regard to those incidents were in fact waived.

8. It was the belief of the defendant that such waivers entitled her to sublet and it was by reason of that belief that she sublet to the lady who was seen by the son to be in occupation in October by the son. In this, unfortunately for her, she was in error. The point is expressly covered by Section 2 of the Law of Property Amendment Ordinance, Cap.24 which provides that where a licence is granted to do a thing which without such licence would create a forfeiture, such licence unless otherwise expressed, extends only to the specific breach for which permission was given.

9. In those circumstances, I must hold that if there was a subletting in October as alleged by the plaintiff then any waiver that had been given for previous breaches did not cover that particular breach.

10. The evidence as to when the defendant last paid rent was unsatisfactory and such as it was would only appear to be in respect of the month October/November. In fact there was no positive evidence as to when it had been paid but I think it would be reasonable to conclude that the defendant paid the plaintiff rent on or about 20th October. At that time the sub-tenant had not gone into possession, and I am of the opinion that when it was paid both the plaintiff and her son were very probably unaware of the subletting. Indeed, in support of that opinion I had evidence from the plaintiff that she was out of the Colony until 26th October, and it would appear that almost immediately after speaking to her son the sone informed the defendant of the forfeiture. In those circumstances, it could not be said that the plaintiff had waived this final subletting.

11. It was also part of the defendant's case that after the tenancy was created she consented to the plaintiff's son having the right to pass through the premises let to her in order to do certain work on a portion of the premises that he occupied. She said that in consideration of this, she was given permission by the plaintiff to sublet. This was denied by the plaintiff in cross-examination, and the evidence of it given by the defendant was so vague and uncertain that I did not feel it necessary to consider whether there had been lawful variation of the tenancy agreement.

12. At the conclusion of the hearing, I was satisfied that there had been a breach of the covenant against subletting by the defendant, and that her tenancy in the premises was forfeited. However, I also was satisfied that there had been a waiver of previous breaches of this covenant and that immediately on being notified of the breach giving rise to these proceedings the defendant had immediately got rid of her tenant and has since been in sole occupation of the premises. In those circumstances, I felt that she was entitled to equitable relief and I postponed judgment, having heard Miss Leung for the plaintiff, to consider the matter.

13. It is unfortunate that in Hong Kong there is no such statutory provision for relief against forfeiture for breaches of covenants in a lease as are to be found in the Law of Property Act, 1925, in England. The only law that I can find with regard to relief against forfeiture is a very limited relief to be found in Cap.24 and a very questionable relief to be found in Order 88A of the Rules of the Supreme Court. Be that as it may, it is doubtful indeed even if such relief did exist if it could have been available to the defendant on the defence as pleaded. However, if such relief did exist it might well be that her pleading would have been different.

14. It was clear from her pleadings that she was in fact pleading grounds on which equitable relief might have been granted and my disposition would have been to grant it to her, but unfortunately for her she had not in fact claimed such relief either in her pleadings or when she appeared before me.

15. This is a point that was dealt with by Huggins J. in the case of Ta Sheng Plastic Goods Co. Ltd. v. Green Island Gement Co. Ltd.⁽¹⁾. That was before the Full Court composed of Hogan C.J. and Huggins J. It is not necessary to outline the facts of that case save to cite the headnote. It is very doubtful whether the headnote, so far as it is relevant, is as authoritative as it would appear to be but it reads:

In that appeal it had been argued before the court that if the doctrine of equitable relief against forfeiture had not been developed in England prior to 1843 to the extent which is provided today by statute there was no reason why the courts of Hong Kong should not, in the exercise of its equitable jurisdiction, so widen the field of equitable relief beyond what existed in England in 1843 to enable relief to be granted today in Hong Kong to the same extent as is statutorily provided for in England. Hogan C.J. did not think it was necessary to consider the question. Huggins J. did, but solely in deference to the arguments presented by counsel. In the course of his judgment he said:

"I come to the conclusion that relief can be granted in Hong Kong only when application has been formally made. Today an application for relief can probably be made either by way of counterclaim where proceedings for forfeiture have been instituted or by action where they have not."

Clearly that pronouncement of Huggins J. was obiter. Nevertheless I would be, indeed, hesitant before I would turn away from any pronouncement of Huggins J. obiter or otherwise.

16. In the present case, as I have said before, there was no express claim for relief. I did, at the conclusion of the hearing, ask Miss Leung, counsel for the plaintiff, if she wished to say anything to me on this point which I raised myself. It was not on the pleadings, and clearly it was a point that she had not anticipated being raised. The plaintiff had appeared at the hearing to meet the defence filed and her counsel, accordingly, was not prepared to meet something that was not pleaded; nor could she be expected to.

17. It is my opinion, and I am fortified in this by the observations of Huggins J. that I have just quoted, that where relief is sought it must be sought in such a way that a plaintiff is aware of it and is in a position to oppose it. This can only be done in some positive way by the person seeking the relief and one positive way is by express pleading. For these reasons I found for the plaintiff on the forfeiture.

18. With regard to her claim for damages it was my opinion that no damages other than nominal damages had been established, and accordingly I award her $1 in respect thereof.

19. I award mesne profits at the rate of $500 a month until handing over of vacant possession; and, with the consent of the plaintiff, impose stay of execution for two months.

20. The plaintiff is also awarded costs.

Representation:

Miss J. Leong (S.C. Mok & Co.) for Plaintiff.

Defendant in person.

(1) (1966) H.K.L.R. 24.