Yeung Mee Yu v. Cheung Siu Chuen

IN THE SUPREME COURT OF HONG KONG

SUMMARY JURISDICTION

DISTRAINT No. 35 of 1946.

-----------------

Coram: E.H. Williams, Puisne Judge

Date of Judgment: 25 February 1947

-----------------

JUDGMENT

-----------------

1. The written agreement regarding the SIU TAK eating house, 106 Thomson Rd., Ground Floor, between plaintiff (grantor) and defendant (grantee), as successor to two other persons, expired on 4th April, 1946. The evidence shows that plaintiff had been owner of the SIU TAK eating house for some years before the war and had held a licence for it from the Urban Council. She had also been principal tenant of the floor. On 28th February, 1944, she had entered into an agreement for the hire of the business with defendant's predecessor: perhaps at that time the eating house business was not a flourishing one.

2. The following points are noteworthy in the agreement:-

1. The plaintiff did not give up her whole interest in the floor, reserving for herself the rear cockloft.

2. The grantee agreed to pay a named monthly sum for the hire of the furniture and fittings and, in addition, he was to pay the shop 'rent'. That amount was not stated in the agreement but it is clear from the evidence that shop 'rent' meant the rent previously payable by the plaintiff to her landlord for the floor i.e., the shop and 2 cocklofts. In effect as regards house rent, plaintiff was to live rent free.

3. The agreement was for a definite period.

3. For the duration of the written agreement and thereafter, it is in dispute whether plaintiff paid the rent direct to the landlord, receiving it in turn from the grantee or whether the grantee paid direct to the landlord. The rent receipts are in the name 'SIU TAK' but that gives no help nor does the fact that defendant had in his possession most of the rent receipts issued by the landlord. The probabilities are that plaintiff herself paid as it is unlikely she would prejudice her position as principal tenant by allowing the grantee continuously to pay, thereby tending to mislead the landlord as to who was the real tenant.

4. On the expiry of the written agreement in April 1946, a verbal agreement was entered into by plaintiff and defendant for the continuation of the hire of the business. For the 6 months prior to that date, defendant had paid $120 per lunar month for the hire and $80 per calendar month for the rent. Plaintiff claims that the agreement was for the continuation of the hire at a total figure of $240 per lunar month (i.e. including rent) for a period of 3 months. This period was given in order to allow defendant to find other premises. On the other hard, defendant claims that the $120 figure was increased to $240 and that in addition, he was to continue paying the rent. He also asserts that the period of hiring was not fixed. On that point, I accept the evidence of the plaintiff that it was for a definite period of 3 months. Relations between the parties at this time were friendly.

5. At the end of June, however, defendant had probably realised that the Landlord & Tenant Proclamation might protect him and he did not give up the premises. From that onward, relations between the parties became unfriendly. Solicitors' letters passed between them in July. Defendant was claiming he was the principal tenant and plaintiff was claiming he was merely a licensee in the premises. The sequel to the dispute was that plaintiff, in a declaration for distress, claimed that 5 months' rent at $240 per lunar month was due for the period 2nd August to 27th December.

6. The terms of the verbal agreement between plaintiff and defendant being in dispute - each contradicting the other - I must decide the issue mainly from the surrounding circumstances and with the aid of any available documents. The evidence of the landlord's rent collector does not help materially - she only began to collect rent about July. She collected for the first month from defendant and thereafter for July, August and September from plaintiff in one sum. The payment of this lump sum is admitted by plaintiff, $80 for July and August, and $100 for September. The increase to $100 was offered by her to the collector - this she has also admitted. The date of the actual payment is not known; plaintiff thinks it was in September. The rents for October and November were paid by defendant to the collector and thereafter the collector, on the protest of plaintiff, collected no further rents from defendant. The May receipt was in the possession of plaintiff and the June one in the possession of the defendant.

7. There is one document, however, to which I attach considerable importance. It is a receipt given by plaintiff to defendant on 2nd June, 1946 for $240 for the hire of the SIU TAK and furniture for the period 5th June, 1946 to 3rd July, 1946 i.e. after the verbal agreement was in force. In the receipt, there is no Chinese expression 'Po Tso' or 'Uk Tso' (shop rent or house rent): the wording of the receipt makes it quite clear that the $240 is for the hire of the business (i.e. furniture and fittings). Had the $240 covered the shop rent as well, I would have expected additional words in the receipt to make that evident. Moreover, of the $240 included rent, it is unlikely that plaintiff would have volunteered an increase of rent. On the other hand, if the $240 did not include rent, then any increase would fall on defendant. No reasonable explanation has been given by plaintiff as to why the arrangement, regarding the amount due in force under the written agreements, should be altered in the way she claims when the verbal agreement was reached.

8. I have therefore come to the conclusion that the verbal agreement was as claimed by the defendant viz., an increase of the hire money to $240, defendant still being responsible for the amount of the shop rent. Plaintiff has claimed 5 lunar months rent at $240 p.m. I find that she is the principal tenant and was therefore entitled to receive from defendant rent for that period i.e. $80 for Aug, $100 for September and $100 for December. Credit must be given to defendant for the periods October and November for which he paid direct to the landlord's collector.

9. Plaintiff is therefore entitled to distrain for the amount of $280. She had claimed for a sum far in excess of that to which she was entitled. On the other hand, had she claimed the correct amount, I doubt whether defendant, in view of his claim in July to be the principal tenant and to have the right under the agreement to pay direct to the landlord, would have paid the $280. The distress was therefore right in part and wrong in part.

10. I think justice will be done by holding that:

The goods to be released to defendant on payment by him of the $280 and the .1/3rd distraint fees.

11. I give no ruling on the point as to whether plaintiff has a claim for $1200 for hire. That is a separate matter not germane to the issue, before me. In order to avoid trouble in the future, defendant would be well advised to pay the hire sum of $240 per month to plaintiff with whom he had the verbal agreement and not to any third party.

12. In future also defendant should pay the rent to plaintiff and the landlord should look to the plaintiff for such rent and not to any other person.