Shing Hing Co (Equipment & Supplier) Ltd v. Leung Sui Nam t/a First Shoes Co

IN THE SUPREME COURT OF HONG KONG

HOLDEN AT VICTORIA

ORIGINAL JURISIDICTION

ACTION NO. 1694 OF 1972

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Coram: Trainor, J. in Court

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JUDGMENT

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1.  In these proceedings the plaintiffs claim possession of No. 2 Lan Fong Road, Ground Floor, Causeway Bay, Victoria, Hong Kong held by the defendant under a verbal tenancy from month to month. The plaintiffs claim that they terminated this tenancy by a notice to quit issued in compliance with section 3(1) of the Tenancy (Notice of Determination) Ordinance, 1962 served on the 14th December, 1971 to terminate on the 30th June 1972. They also claim arrears of rent from the 1st June to the 30th June: mesne profits from that date until delivery of possession; and costs.

2.  In his defence the defendant denied that the plaintiffs were the owners of the property and alleged they were merely the servants or agents of the owners, with no authority to issue and serve the notice to quit. He further pleaded that about the 1st November 1970 he paid a sum of $4,000 as key or construction money to Mr. Au Sing, the landlord at the time of the letting to the defendant, and agreed with Mr. Au to erect at his own expense a cockloft which would on the termination of the letting become the property of Mr. Au. He alleged that in consideration of him building the cockloft Mr. Au agreed that he should have protection from eviction for 5 years. He further pleaded that by reason of the payment of the $4,000 and the erection of the cockloft at a cost of $1,800 he was entitled to protection from eviction for a period of five years pursuant to the Tenancy (Prolonged Duration) Ordinance. He further pleaded that he proffered the rent for the month of June to the plaintiffs solicitors.

3.  The plaintiffs in reply denied that the defendant paid any key or construction money in relation to his tenancy. They further denied that the defendant was promised protection from eviction for five years in consideration of a cockloft being built. They admitted the defendant had sent a cheque equivalent to two months’ rent to the plaintiffs’ solicitors but alleged that this was received after the expiration of the notice to quit, and said it was returned to the defendant. It was common case that the premises were business premises.

4.  The notice to quit and its service were duly proved.

5.  The plaintiffs established their ownership of the premises by proving an assignment dated the 24th November, 1971 made between the Mr. Au referred to in the defendant’s defence and another to the plaintiffs. The defendant neither by cross examination nor his own evidence tried to repudiate the ownership of the plaintiffs.

6.  The case turned on whether or not the Tenancy (Prolonged Duration) Ordinance applied.

7.  In support of their contention that it did not the plaintiffs relied on the evidence of Mr. Au. He emphatically denied that he had ever received key or construction money from the defendant or from anyone on his behalf. So far as the cockloft was concerned, he said, this had been constructed by a Mr. Wong who was the tenant before the defendant. Mr. Wong, the witness said, had told him that when the tenancy terminated the cockloft would belong to him, the landlord. In cross examination the defendant asked the witness did he agree he had received key money from a Mr. Chiu. The witness’s reply was an emphatic denial. At no time in cross examination did the defendant suggest to the witness that the defendant had paid him any money. No reference at all was made in the cross-examination to the cockloft or to the promise of five years protection as alleged in the defence.

8.  This defendant who was unrepresented, did not question the formalities or service of the notice to quit. He said that he took over the premises from a Mr. Chiu to whom he paid $7,240 on the 20th April, 1969 for the stock in trade. (In cross examination he produced cheque-book stubs showing this payment). He said that in October 1970 when Mr. Au called for his rent he denied having received a sum of $4,000 from Mr. Chiu. The witness did not say what this $4,000 represented but, he said, as a result of this denial a meeting between Mr. Au, Mr. Chiu and the defendant took place on the 1st November, 1970 at which meeting Mr. Au admitted receiving $4,000 from Mr. Chiu. So far as the cockloft was concerned the defendant confined himself to saying that he had made extensions to it. He made no reference to an agreement that he should be allowed to remain in the premises for five years in consideration of him having done so. No allusion was made to the cost. The defendant gave further evidence as to conversations with Mr. Au before Mr. Au sold the premises to the plaintiffs but I do not consider they have any real value so far as the issue in this case is concerned.

9.  In cross-examination the defendant admitted that he told the Registrar that he had paid $4,000 to Mr. Au and obtained a receipt from him. He explained the discrepancy between this and his evidence in this Court by saying it was a slip of his memory. (It might be noted here that he also alleged in his defence that he had paid $4,000 on the 1st November, 1970 to Mr. Au). The defendant went on to say in further cross-examination that it is the practice not to give receipts for key-money and that it was actually Mr. Chiu who paid the money. When the defendant was asked why he should pay key money on the 1st November 1970 if had been in possession in June 1969 he replied that in March or April 1969 he agreed to take the premises and to pay $4,000. He did not say to whom this $4,000 was due but he said in later cross examination that the payment was made to Mr. Chiu by cheque on the 7th March, 1969, and he produced a cheque stub to support this.

10.  It was only in cross examination that the defendant made any reference to a further tenancy for five years he was to have in the premises. He said that this term was to commence on the 1st November, 1970 the day of the alleged conversation between himself, Mr. Au and Mr. Chiu. When asked why the terms should commence then, he having been in the premises since 1969, the defendant said that maybe Mr. Chiu had made use of the money he, the defendant, had given him, and had not handed it over to Mr. Au until then.

11.  In his evidence Mr. Au was emphatic that no money was paid to him by the defendant, Mr. Chiu or anyone. His evidence was convincing, and nothing in the evidence of the defendant tended to weaken it. Indeed, the omission to deal with, either in cross examination or in his own evidence, much of what was alleged in the Defence, and the vacillation and contradiction in what the defendant said in cross examination forced me to the conclusion that he was a very unreliable witness.

12.  I find: that no money was paid by the defendant, or on his behalf, to his landlord by way of key or construction money and, that by virtue of, section 5(2)(b) the Tenancy (Prolonged Duration) Ordinance does not apply: that the defendant’s occupation has been properly terminated. Judgment is granted to the plaintiffs in the terms of the statement of claim.

13.  I award the costs of the proceedings to the plaintiffs, together with such costs of interlocutory proceedings as the Registrar shall have found to be costs in the cause less the costs that the Registrar in similar proceedings may have found to be payable by the plaintiffs. The Plaintiffs consent to a stay of execution until the 1st March, 1973