Mui Yu Investment Limited v. Siu Kin Wah

CACV000001/1986

BETWEEN

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Coram: Cons, V.-P., Silke,-J.A. & Penlington, J.

Date of hearing: 24th April, 1986.

Date of delivery of judgment: 24th April, 1986.

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JUDGMENT

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Cons, V.-P.:

1. In the action from which this appeal arises the Plaintiff claims to be the owner of a certain parcel of land. He issued a trait for the recovery of that land from the Defendant who is in possession thereof.  He alleged that the Defendant had held under a previous tenancy but that the tenancy had been terminated by appropriate notice and the Defendant had failed to vacate.

2. The Defendant filed a defence. He admitted receipt of a letter bearing the same date as the alleged notice to quit. Save that at all material times, including the then present, he was a tenant of the premises in question, he did not admit anything. In addition he raised an estoppel, setting out certain facts which he alleged would prevent the Plaintiff from recovering possession.

3. The Plaintiff took out a summons in the District Court. By the marginal note it was expressed to be in part under Order 18 rule 19(1) and claimed that the defence should be struck out on all the grounds contained in that sub-rule. In point of fact sub-rule (1)(a) is not applicable in the District Court. The Judge must have accepted that the application in that respect was made under Rule 38A of the District Court Rules. The other part of the summons was based on rule 27 of those rules.

4. The proceedings came on before Judge Fung. The Plaintiff had filed an affidavit in support, but the Defendant had chosen to file nothing. We understand that the solicitor who then appeared for him relied solely upon legal argument. In his ruling the Judge did not expressly say so, but it is quite clear from the reasons which he has given that he found no adequate defence disclosed by the facts alleged to support the estoppel, i.e. a rule 38A decision. He therefore struck out the defence. He should of course have limited the striking out under that head to paragraph 7 - which put forward the estoppel - for he made no finding that the defence was scandalous and so on. But it makes little difference, because he went on to deal with the rest of the pleading under rule 27, and found that it disclosed no reasonable defence. Accordingly he gave judgment for the Plaintiff. There was subsequently an application to set aside that judgment and for leave to amend the defence which had been struck out, but the application was rejected by the Judge.

5. We understand now that the Defendant wishes to appeal against both decisions of the. Judge i.e. the initial decision to enter judgment and a decision not to set aside the judgment. That is not clear from the papers and we might well observe that the paper work throughout this litigation leaves a great deal to be desired. It may have caused a certain amount of confusion and certainly has led to a great deal of waste of time and energy.

6. One ground of appeal raises the question of jurisdiction and in support of that ground there was earlier this morning an application to adduce fresh evidence. Such an application could only succeed if there were special circumstances, because clearly there had been a hearing on the merits. The requirements of Ladd v. Marshall ⁽¹⁾ were equally clearly not satisfied. The evidence could easily have been put before the Judge below. But nevertheless we allowed the evidence in, taking the view that where there is good reason to think the jurisdiction has in fact been exceeded, it would be quite wrong to let the question go, as it were, by way of default.

7. The evidence thus let in was that the rateable value of the premises in question is well above $90,000. The District Court's jurisdiction is limited to 45,000 being decided by the annual rent, the rateable value or the annual value, whichever is the least. The particulars of claim justified the jurisdiction by reference to the annual rent, which was said to be below $45,000. The actual rent was shown in the Plaintiff's affidavit to have been $200 per month some 17 years ago, with provision to be raised to $338 per month by the time the lease expired, I think some 8 years ago (when the Defendant held over to become a monthly tenant). The Judge must have accepted nevertheless that the rent remained at the lesser figure, for he made that the basis for his order for mesne profits.

8. Perhaps a warning note should have sounded for somebody, for the Plaintiff's own affidavit mentioned that the rent collected by the Defendant from his sub-tenants amounted to over $96,000 per annum. More importantly, from today's point of view, at the time of the writ there was no contractual tenancy in existence. It had been determined one month and two days previously.

9. Mr. Chan, who appears for the Plaintiff today, has, if I may say so, argued his case with great clarity and skill. He points out that the Defendant had, at that stage, become a tenant by sufferance. But he has not been able to show us any authority which indicates that a tenant by sufferance is obliged to pay rent, or what in these particular circumstances that rent would have been. He has referred us to a decision of Judge Charles in the District Court, Yip Chuen v. Wong Tin Kwan⁽²⁾. With respect I can find no assistance in that case. The Judge with every respect to him seems to have taken the criterion with which he visa concerned, - "the annual rent or value thereof" - and assimilated those words into another phrase - "the annual worth of the premises". The rules he then lays down relate only to the latter phrase. As I read the statute with which we are concerned, it provides three distinct criteria within any of which a plaintiff may, if he can, bring himself. But he is restricted to only those which are appropriate.

10. Mr. Chan has raised another point. He refers us to a passage in the proposed amendment to the defence which I indicated a little earlier was rejected by the Judge. That amendment contained an allegation that the Defendant was entitled to remain in the premises at a rent of $200 per month. Mr. Chan asks us to accept that as an admission in favour of the Plaintiff, binding upon the Defendant because it was made by counsel acting on his authority.

11. If that amendment had been allowed by the Judge below, I think there would have been considerable force in Mr. Chan's argument. However it was not allowed and in my judgment it does not form part of the present case and is not binding as an admission by the Defendant.

12. As I see this matter, at the time the writ was issued there was no annual rent. The Plaintiff could therefore turn only to the other criteria set out in section 35. He is not able to rely on annual value, which leaves only rateable value. The evidence that is now before us, uncontradicted despite the opportunity to adjourn for the filing of further affidavits, shows that the rateable value of the premises in question is well above the limits of the District Court's jurisdiction. It follows that we are bound to allow the appeal and order that the action be struck out in the Court below.

Silke, J.A.:

13. My Lord President has set out and delineated upon the matters in issue with his usual clarity. With the conclusions to which he comes I am in full agreement. There is nothing that I can usefully add. I too would allow the appeal and order that the action be struck out in the District Court.

Penlington, J.:

14. I too agree.

(1)   [1954] 1 W.L.R. 1489

(2)   [1957] D.C.L.R. 56

Representation:

Brook Bernacchi, Q.C. & Sui See Chun (M/s Kwan & Kwan) for Defendant/Appellant

Louis K.Y. Chan (M/s Leo K.W. Lok & Co.) for Plaintiff/Respondent