Tang Tson Hin Tso and Others v. Cheng Chun Hing
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IN THE SUPREME COURT OF HONG KONG (APPELLATE JURISDICTION) CIVIL APPEAL NO.8 OF 1972 (On appeal from V.D.C. No. 47/1971) ________________________
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________________________ JUDGMENT ________________________ Huggins, J.: 1. The respondent plaintiff is a family tong, suing by its three managers. The tong was alleged to be the owner of a piece of agricultural land in the New Territories and it claimed against the appellant defendant possession and mesne profits. It was common ground that the Appellant had, by an agreement in writing dated 18th August 1956, been granted a tenancy of the land from 1st August 1956, but there was a dispute as to the term created: the Respondent’s contention was that it was for thirteen years while the Appellant’s was that it was for fourteen years. However, the substantial matter in issue was whether there was a term in the agreement giving the tenant an option of a new lease. The learned judge held that there was not and against this decision the tenant appeals. 2. The first thing to be mentioned is that each party to the agreement had what purported to be a document containing the exact terms, but the two documents were not identical. However, for the purposes of the trial it was agreed that the official translation of the Appellant’s copy should be treated as correctly representing the Chinese text of both documents subject to one condition. That condition was that the Respondent did not concede that there appeared in the true agreement eight characters which have been translated as:
The Respondent’s case is that those eight characters are a forged addition to the document. 3. The learned judge found that the eight characters were a forgery and it is contended on the appeal that that finding was against the weight of the evidence. An expert in handwriting was called and expressed the view that the eight characters were not written by the person (now deceased) who wrote the rest of the Appellant’s copy, because of the differences which he found. However, the learned judge said he was “not prepared to accept on those differences alone that any of those characters have been forged”. He proceeded to state the matters upon which he did base his conclusion. The first was a matter of dates. Although the Appellant pleaded in his Defence that the agreement was for a term of fourteen years the Agreement quite clearly states that it was to be for “a term of thirteen years (i.e. from first day of August 1956 A.D. to the end of July 1969 A.D.)”. What the Appellant had sought to establish was that there was a subsequent agreement that the term of thirteen years should not commence until 1st August 1957 or alternatively that the subsequent agreement extended the term to one of fourteen years. This subsequent agreement was said by the Appellant to have been made some time in 1960. The Appellant sublet some buildings which he erected on the land, the last such subletting being made in 1964 for a period terminating in 1969. That sub-tenancy was subject to a provision for extension if the Appellant himself should receive an extension of his head lease. As the learned judge pointed out, if at the date of this subletting the head lease had already been extended to 1970 it is strange that the sub-tenancy should have been granted only until 1969: by that date the Appellant might well not have known whether he was himself going to receive an extension of the head lease. 4. The second point relied upon by the judge as indicating a forgery was the absence of any reference to one year’s extension in the Respondent’s copy of the agreement. Although no translation of the Respondent’s copy was in evidence I think we must accept it as having been agreed that no reference to a one year’s extension did appear in that agreement. It is unfortunate that, the parties having apparently agreed to abide by the Appellant’s copy of the agreement subject only to the eight questioned characters, the court interpreter should have been invited to translate part of the Respondent’s copy. He was so invited and indicated that although a waiver of the rent for 1956/7 which appeared in the text of the Appellant’s copy appeared as a marginal note to the Respondent’s copy there was no reference at all in the Respondent’s copy to the extension for one year. However, that evidence was before the judge at the request of the Appellant’s counsel and the Appellant cannot now be heard to complain that the judge acted upon it. In any event r.56 of the District Court Civil Procedure (General) Rules permits the judge to dispense with a formal translation. If the waiver of rent was noted in both copies it is strange that the one year’s extension was mentioned in only one of them. 5. Counsel submits that that was not sufficient evidence to justify a finding of forgery and further complains that the learned judge failed to mention several pieces of evidence which tended to negative forgery. On the first aspect he suggested that the judge was wrong to decide the issue, as he expressly did, upon a balance of probabilities, the contention being that where a crime is alleged in a civil action something more than a balance of probabilities is required. I cannot agree and I find nothing in the passages to which we have been referred in the judgment in Blyth v. Blyth([1]) which leads me to the conclusion that the learned judge here applied the wrong test. There must be a preponderance of probability in every civil case but in some cases more evidence will be required to produce that preponderance than in others. The learned judge said nothing which suggests that he failed to appreciate that the quantum of proof required to establish forgery was greater than that required to establish a fact of less gravity. Was there sufficient evidence to justify a judge, applying the correct text, in finding that this was a forgery? I think there was. One must bear in mind that it was the Appellant who testified that the eight characters were written in his presence and that the learned judge was obviously doubtful about his veracity. It is true that the learned judge did not mention all the evidence tending to negative forgery. In particular he did not mention that the eight suspect characters appeared in a column containing eleven characters so that if the suspect characters were not there when the document was executed the greater part of a column was left blank. That would not, however, have been strange because the next part of the document was a receipt clause, which might well have been started in a new column even if the preceding column had contained only one character. Even with the eight characters there was a gap sufficient to take the first four characters of the receipt clause if the writer had wished to put them there. The second omission alleged is an omission to mention the fact that the Respondent by its agent apparently endorsed a consent to subletting on the Appellant’s copy of the agreement at a time when, it is suggested, the forged characters would have been obvious and would not have passed unnoticed. We have in fact no evidence that the Chinese characters which we can see in the Appellant’s copy are a consent to subletting: they are not included in the translation which is before us and I can find no record in the notes of proceedings of any interpretation by the court interpreter. Quite apart from that we cannot say when the characters were added to the document, if they are forged, and so cannot be certain they were there when the characters alleged to be a consent to subletting were written. Even if they were there it is not impossible that they could pass unnoticed. In my view we could not fairly say that the learned judge’s finding that the characters were a forgery was against the weight of the evidence. 6. That first point is relevant only to the quantum of mesne profits to which the Respondent is entitled if it succeeds in its claim for possession. I turn now to the clause upon which that claim to possession rests. It was in these terms:
7. There are two limbs to the argument. As I have already said, the learned judge interpreted this clause as conferring a right of pre-emption and not an option to renew and it is contended that that was wrong. Secondly, the judge found that even if it conferred an option the houses were used by the landlord so that the condition precedent for the exercise of the option was not fulfilled and it is said that that was wrong. 8. As to the interpretation of the clause the reasoning of the learned judge was that “the words ‘priority right’, while a long way removed from ‘renewal right’, are yet very close to, if not the same as, ‘first refusal’”. Counsel for the Appellant submits that it was wrong to make a comparison such as this because it involves comparing with the English terms of art English words selected not by the contracting parties but by the translator. One must, indeed, be careful in making such a comparison but at the same time we are entitled to assume that the English words used by the translator convey substantially the meaning of the Chinese characters chosen by the contracting parties. Then counsel says, in reliance upon the head note to TANG Kai-chung v. TANG Chik-sang([2]), that in a case affecting tong land in the New Territories “any aspect of English law .... must be disregarded” and that therefore it was wrong to apply the English law concerning options and rights of pre-emption to the land in this case. That part of the head note was based upon a passage in the judgment of Mills-Owens J. at p.295 and I think it is clear from the context that all the learned judge was saying was that the court must recognise and enforce Chinese custom and customary right in a case of a tso (or tong) in the New Territories and that one must disregard any aspect of English law which was inconsistent with Chinese custom or Chinese customary right. That being so it was legitimate, and indeed necessary, for the learned judge in this case to ask himself whether the language used by the parties indicated an intention to confer an option or a right of first refusal, those being rights recognised not only by the law of England but also by the general law of Hong Kong. It was never suggested to the judge that any principle of Chinese customary law was inconsistent with the general law in this respect and no authority has been shown to us which would suggest that it is. Having regard to what I said in NG Ying-ho v. TAM Suen-yu([3]) one might have expected some evidence to be given if it were alleged that the Chinese customary law differed from the general law in any material respect. It has been submitted that it is inconceivable that the Appellant should have agreed to taking a right of first refusal to rent houses which he himself had built, but as the alternative may have been to surrender the houses to the landlord absolutely I do not think that it is by any means inconceivable. Our attention was drawn by counsel for the Respondent to dicta in TONG Mo-chiu v. Kai Sun Iron Factory([4]), where a term in an agreement for a two-year tenancy provided that “at the expiration of the term [the tenants] shall have priority to continue the tenancy for another term of two years”. Mills-Owens J. said at p.197:
9. Hogan, C.J. concurred with the judgment of Mills-Owens, J. but that judgment was not dependent upon the view expressed as to the meaning of the “priority” clause because it was common ground that in one way or another the tenants had had a second term of two years. The learned judge in the present case mentioned the fact that if the clause he had to interpret conferred a right of pre-emption the condition that the houses “should ... not be used by the landlord after the expiration of the lease” was strictly unnecessary, since if the landlord wanted to use them it would not offer them to anyone. The importance of that is lessened by the fact that this agreement was manifestly not drafted with the precision which one would expect from a person with a legal training. The words “priority right of lease” must be distinguished, however, from the words “priority right to lease”: a priority right of lease can be prior only to another right of lease, i.e. to a right in a third party. An option is a right prior to the usual rights of the landlord. I have come to the conclusion that the learned judge was right when he decided that the clause did not confer an option on the Appellant. 10. Although it is not suggested that the Appellant has been given his right of first refusal and has accepted the offer, as I understand it he claims an equitable right to possession on the ground that, as he alleges, the Respondent has offered to let the land to someone else without first offering it to him. This argument is based on a contention that the Respondent is not using the houses itself but proposes to let them to some relatives of the managers of the tong. The submission goes like this. Although the Plaintiffs are the tong the “makers of the lease” were two persons who were then the managers of the tong: they were described in the agreement as “Party-A”: in the “priority” clause it was use by “the landlord” which was contemplated and this wording was employed deliberately to distinguish between “Party-A” and “the landlord”. I do not understand the force of this argument. The “Lessor” is described at the end of the agreement as “Managers of Tang Chun Hin Tso” and there can be no possible doubt that the managers were throughout acting as agents for the tong. It has not been explained why three persons’ signatures now appear despite the fact that it is common ground that only two of them were then managers, but nothing turns upon that . It was as agents that the makers of the document referred to “a small portion of the property of our tso”. It was the tong which was signified by “the landlord” and the question is whether the contemplated use is use by the tong. I think confusion has arisen from the fact that Ground 3 of the grounds of appeal refers to a plurality of plaintiffs when in fact there is only one plaintiff – the tong. 11. A further contention is that if the tong lets the houses to relatives of the managers it is not itself using them, but is committing a breach of the agreement to give the Appellant the first refusal. The learned judge rejected this contention and held that such a letting was a purely internal arrangement for the private distribution of the tong’s benefits, so that the use by the relatives was nonetheless a use by the tong. Counsel for the Appellant complains that he was not entitled so to hold in the absence of expert evidence as to who were beneficiaries under the constitution of the tong and that for this reason alone the Appellant would be entitled to a new trial. I think the answer to this last submission is that there was evidence that all the persons who are to be allowed by the tong to occupy the houses are members of the tong. The learned judge was entitled to take cognizance as a notorious principle of Chinese customary law that a tong has as its object the benefit of its members in the discretion of the managers. He was not persuaded that the arrangement would amount in law to a letting, but considered that even if it did that would not mean that the use by those members who were the tenants was use otherwise than by the tong. In my view the judge rightly considered that it mattered not whether an estate in the land was granted to these members and that on either view the houses would be in the occupation of the same individuals. The interpretation contended for by the Appellant would, I think, limit ‘use by the tong” to either use by all the members of the tong or use by the managers as offices or other necessary accommodation for the administration of the tong. Obviously the houses could not be occupied by all the members of the tong and it would be absurd to interpret use by the tong as requiring use by all. If a corporation which owns a house chooses to allow an employee to occupy it as a residence so long as he remains in the corporation’s employment, it cannot fairly be said that the corporation is no longer using the house. Equally here so long as the managers restrict the use to persons who are members of the tong it seems to me that they are not required, under the terms of the agreement, to offer to let the property to the Appellant. There was some argument about the propriety of allowing the Appellant to take this last point upon the appeal, but in view of the conclusion we have reached upon the point it is unnecessary to discuss the technical issue. 12. This was not a case where I would normally have thought it necessary to reserve judgment, but the argument before us extended over the whole of two days, those days being nearly six months apart. This is not the first time we have had to complain about an arrangement which can lead to such protraction of appeals, and so long as judges are unable to concentrate exclusively on either first instance or appellate work similar difficulties are bound to occur. The judges and both branches of the Profession have for long been urging the establishment of a permanent Court of Appeal and what has happened in the present case is just one more example showing that the public is inadequately served because of the failure to implement that recommendation. 13. I would dismiss the appeal. |