Yoshiya Property Management Ltd v. Yau Po Hing

DCCJ1175/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1175 OF 2007

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BETWEEN

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Coram : H.H. Judge Chow

Date of Hearing : 20^th July 2007

Date of Handing Down Decision : 12^th September 2007

Decision

1.This is the Defendant’s application to strike out the Statement of Claim in this action under O. 18 r. 19 of the Rules of the District Court.

2.In this action the Plaintiff claims against the Defendant for the recovery of vacant possession of the premises situated at Flat E, 1^st Floor, Block 13, Chi Fu Fa Yuen, Pokfulam, Hong Kong (“the Premises”), arrears of rent and mesne profits.

3.Regarding Paragraph 1 of the Statement of Claim the Defendant says that instead of the Plaintiff, “Yoshiya International Corporation, Limited” was named in the Tenancy Agreement as the landlord of the Premises.  If that is the case, the Defendant should adduce evidence to support her allegation.  The burden is not on the Plaintiff to prove to the contrary.  If there is any dispute, this issue is to be tried.

4.The Defendant submits that the Plaintiff is not a person entitled to confer the right to occupy the Premises upon her, and it is not even a party to the Tenancy Agreement, so she believes that the action is entirely misconceived and the action is liable to be struck out on the grounds that it is scandalous, frivolous or vexations and/or is an abuse of the process of the court.

5.The Defendant’s Counsel submits that the Plaintiff’s reliance on the doctrine of “tenancy of estoppel” is misconceived.  He submits that ‘If a person has no legal estate in a land, he of course has no right to create an interest which is greater than what he has in that land in favour of another ……  Notwithstanding that he has no legal estate in the land, the alleged landlord who relies upon the doctrine of “tenancy of estoppel” must show that he has some interest in the land or right to use the land’.  He relies on the case of Fung Siu Kam & Ors. v. Lo Shun Cheung [1984] HKC 107 to support his contention. That case concerns an action for forfeiture of a tenancy and for rent and mesne profits.  The argument put forward by the Defendants before the Court of Appeal was that the Defendants should be allowed to contend that the agreement under which the Plaintiff sued was illegal and that the court should not lend its aid to enforce an illegal agreement.  That is the issue the Court of Appeal had to decide.  The issue does not touch on the tenancy by estoppel.  The second case relied upon by the Defendant is Brutton v. London & Quadrant Housing Trust [2000] 1 AC 406.  In that case the House of Lord said, at p. 416 of the judgment, that “It therefore seems to me that the question of tenancy by estoppel does not arise in this case.  The issue is simply whether the agreement is a tenancy.”  As the above two cases do not deal with tenancy by estoppel, they do not support the Defendant’s submission.

6.The Plaintiff submits that the written Tenancy Agreement created a tenancy by estoppel in respect of the Defendant vis-à-vis the Plaintiff.  This doctrine of estoppel is clearly set out in the case of Tang Man Kit & Foo Tak Ching v Hip Hing Timber Company Limited (CACV 137/02).  In that case, the Court of Appeal stated:-

“	52.	As pointed out by the editors of Hill and Redman’s Law of Landlord and Tenant (17th Ed.) Para 88, this estoppel has two aspects-
		(1)		A tenant is prevented or estopped from denying the right of his landlord to grant the lease and, conversely, a landlord is prevented or estopped from denying the title of his tenant under the lease.
		(2)		A person who has no legal estate in the land may nevertheless purport to grant a lease of that land; in that event, there is created between him and his purported tenant a tenancy by estoppel which binds them and their respective successors in title just as if the landlord had a sufficient interest to grant the lease.
	53.	The position is best stated by Lord Denning MR in Industrial Properties (Barton Hill) Ltd and Others v Associated Electrical Industries Ltd [1977] 1 QB 580:
		‘	If a landlord lets a tenant into possession under a lease, then, so long as the tenant remains in possession undisturbed by any adverse claim – then the tenant cannot dispute the landlord’s title.  Suppose the tenant (not having been disturbed) goes out of possession and the landlord sues the tenant on the covenant for rent or for breach of covenant to repair or to yield up in repair.  The tenant cannot say to the landlord: “You are not the true owner of the property.”  Likewise, if the landlord, on the tenant’s holding over, sues him for possession or for use and occupation or mesne profits, the tenant cannot defend himself by saying: “The property does not belong to you, but to another.’ ”

7.The doctrine of “tenancy by estoppel” appears to apply in the present case.  I cannot find any justification to strike out the Statement of Claim.  Accordingly I dismiss the Defendant’s application.

Costs

8.I make an order nisi, to be made absolute in 14 days’ time, that the Defendant do pay costs of this application to the Plaintiff, to be taxed, if not agreed, with certificate for Counsel.