Mak Lau Siu Kan v. Lai Man Yau and Another
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IN THE SUPREME COURT OF HONG KONG (APPELLATE JURISDICTION) CIVIL APPEAL NO. 47 OF 1971 ________________________
________________________ Coram: Blair-Kerr, Ag.C.J., Huggins & Leonard, JJ. ________________________ JUDGMENT ________________________ 1. This is an appeal from the judgment and order of the 12th November 1971 made on the hearing of an Inter Partes Summons dated the 19th September 1971 on which the trial judge granted by way of interlocutory relief the following injunctions namely :–
2. The writ of summons in this action was issued on the 19th September 1971 and named the 1st appellant as the sole defendant. By her statement of claim, the respondent alleged that she was the sole owner legally and beneficially entitled to two parcels of land situated at Shum Shui Po and registered in the Land Office as New Kowloon Inland Lots No. 3754 and 3755. These two lots are contiguous and not divided from one another by any physical boundary; they are collectively known as “Dragon View” and on one of them stands an apartment building known as “Vantage House” and on the other a villa formerly known as “Hangover House”. The Statement of Claim alleged that the appellant had since the 22nd of March 1970 been permitted by the plaintiff to use a bedroom and the living rooms of the villa gratuitously as a licensee and had slept therein about twice a week; it alleged the termination of the licence by a letter dated the 16th July 1971 requesting the appellant to vacate the villa within forty-eight hours with his personal effects and the appellant’s failure and refusal so to do. It further alleged that the appellant had so locked the gates to the premises that the respondent was completely excluded from them. 3. On the 21st October 1971 it was ordered by consent that the 2nd appellant be added as a party and that the plaintiff should have leave to amend her application for injunctions to include the second appellant and to make all consequential amendments for that purpose. In consequence of this order the inter partes summons was amended so as to pray for injunctions in the terms of those granted. 4. For the purposes of this appeal it is necessary for me to refer briefly to the facts – both those agreed and those in issue. In doing so I shall endeavour to abstain from any indications which might in any way prejudice the hearing of this case when it reaches a later stage. As the case is in the nature of a family dispute it is desirable that I should list the persons involved and their relationship to one another. The respondent (plaintiff below) had two sisters Madam LAU Chow-wei, a married woman, and Madam LAU Yuk-ling (now deceased). Madam LAU Chow-wei had one son, CHAN Chi-ho who was married to Madam WONG Suet-man. The 1st appellant and Madam LAU Yuk-ling whom I shall refer to as “the deceased” had associated together for many years; although their precise relationship was in dispute I assume it to have been that of husband and secondary wife or concubine. They had two children, Diana and David. Prior to the purchase of Dragon View the deceased, LAU Chow-wei, CHAN Chi-ho, WONG Suet-man, and the child Diana and POON Wing-pak (who is either the son or nephew of the deceased) lived at 17, Mody Road. The 1st appellant’s principal place of residence was No. 9, Kingston Street, 2nd Floor, Flat A where his son David and his principal wife lived but he was a frequent visitor to and regularly slept for two or three nights a week at 17, Mody Road. Such evidence as is available tends to show that the deceased was the owner of 17, Mody Road. It was common case that the respondent, whose principal place of residence is at 1, Pak Sha Road, Kowloon, was registered as the sole owner of the properties in March 1970, the properties having been purchased at a public auction which was attended both by the respondent and the deceased. It was the deceased who first became interested in the properties and apparently she suggested to the respondent that it would be a good idea to purchase them as their situation was such that she would be more comfortable in them. She was at that time suffering from the fatal illness from which she subsequently died. The deceased, the respondent and their solicitor (Mr. Philip Yuen of Messrs. Yung Yu Yuen) attended the auction and the premises were knocked down to the respondent. It was common case that at this auction the deposit, a sum of $238,000, was paid by the deceased. The day following the auction the respondent obtained from her bankers a cashier’s order payable to the deceased for the sum of $150,000 and it was the respondent’s case that she handed this cashier’s order and a sum of $90,000 in cash to the deceased on the 18th February, 1970 to reimburse her for the amount of the deposit. The appellant’s case was that the deceased was not so reimbursed. The balance of the purchase price namely the sum of $952,000 was paid to Messrs. Yung Yu and Yuen on the 27th February 1970 by the respondent together with a sum of $26,604 in respect of professional charges and stamp duty. Messrs. Yung Yu Yuen & Co. issued a receipt for this sum of $26,604 and from the wording of the receipt it would seem that they regarded the respondent as their sole client. Again it was common case that in February of 1971 the deceased transferred a sum of US$55,000 to the respondent, it being the respondent’s case that this sum was transferred in part payment of moneys which the deceased owned to her, and the appellant’s case that this sum was transferred as the balance of the deceased’s one-half share in the purchase of the properties in question. This contention of the appellants is at variance with a request for an “account for these funds” made on 28th July 1971 by the solicitors for the 1st appellant. Furthermore the plaintiff was registered as the sole owner of the properties in the month of March 1970 and this payment was not made until almost a year later. 5. It was then the case for the respondent that she was the sole beneficial owner of the properties and that the deceased had no interest whatsoever in them, that she was never given any authority or dominion over Dragon View nor was she ever authorised to let the villa to any one. On the other hand it was the case for the 1st appellant that the deceased and the respondent were in equity joint owners of the properties each as to an undivided moiety and that the deceased was given such authority and dominion and had in fact let the villa to the 2nd appellant. 6. The properties consisted of the apartment building and the villa, both contained in one compound. Vantage House, the apartment building, has three flats which were all tenanted. The only access to the compound on which both buildings stand is through either one of two large iron gates. Prior to the death of the deceased, the gate which was known as the east gate was not kept locked, that at the west was. 7. The precise date of completion of sale does not appear from the documents forming the record of appeal. However it appears as likely that the property was available for occupation on or about 20th March 1970 – certainly not as early as the 14th March 1970. In March 1970 the occupants of 17, Mody Road commenced to live in the villa to which the appellant was as constant a visitor as he had been to Mody Road. The position as to residence remained unchanged until May 1970, in which month LAU Chow-wei moved to the Philippines. She returned to Hong Kong at intervals and then lived at the villa. Throughout and until the 1st July 1971 the deceased continued to live at the villa apart from temporary periods in hospital. The 1st appellant does not appear to have changed his mode of life; he remained normally resident at 9, Kingston Street but was a frequent visitor to the villa where he would spend about two nights a week. He appears to have defrayed, though whether from his own funds is in dispute, the ordinary household expenses of those living in the villa. Those residing in the house at the villa did not make any payment to the respondent or to the respondent and the deceased jointly. The deceased, however, was apparently responsible for the collection of rents from Vantage House and the 1st appellant states on affidavit that he collected these rents on her behalf. It is not clear from the papers whether or not these rents were ever paid over to the respondent. There is no evidence to suggest that the respondent ever lived at the villa although the affidavits show that a bedroom was reserved for her in that house in which she might stay if she so desired. The deceased died on the 1st July 1971. She died testate and appointed the respondent as her executrix. At the time of her death and for some time thereafter, LAU Chow-wei, the sister of the deceased and the respondent, was resident in the villa and on or about the 10th July 1971 a dispute arose between LAU Chow-wei and the 1st appellant which resulted in LAU Chow-wei leaving the villa in such haste that she left her clothes in that house. The 1st appellant had spent the night of the 10th/11th July at the villa. 8. The 2nd appellant is what is usually known as a “family” company, the principal directors in which were the 1st appellant, the 1st appellant’s 1st wife and the deceased. 9. On the 10th July 1971 the respondent was ill in hospital. She was discharged from hospital on the 12th July, 1971. On the 16th July, 1971 the respondent’s solicitors wrote to the 1st appellant requesting him to remove his personal effects from the villa, informing him that his presence there was not welcomed and he would not be allowed to enter or remain upon or use the property after midnight on the 17th July, 1971. By a letter dated 17th July, 1971 the 1st appellant’s solicitors in reply suggested two justifications for their client’s presence on the property. They stated that their client had until then no knowledge that the properties were registered in the name of the respondent, that he had good reason to believe that the properties were registered in the name of the deceased to whom “our client paid the initial money for the purchase of the properties. Our client therefore claims to have a beneficial interest in the properties.” This letter went on to claim that the appellant had occupied the premises for over two years with the respondent’s complete acquiescence and with the full knowledge and implied consent of the respondent had spent over $150,000 for improvements thereon. He therefore claimed in the alternative to be a licensee with an interest which, his solicitors claimed, rendered the letter purporting to terminate his licence ineffectual. It will be noted that at this stage he made no claim on behalf of the 2nd appellant. 10. On the 17th July 1971 on the instructions of the respondent security guards went to the premises but were denied entrance. On the 20th July 1971 the two gates to the premises were found to have had new padlocks affixed to them and they were both locked. Since that date to the date of the judgment appealed from it is the respondent’s case that she was denied access to the premises. On the 22nd July 1971 the solicitors for the respondent wrote to the solicitors for the appellants requesting that the respondent (as executrix of the will of the deceased) be afforded access to the premises for the purpose of taking an inventory and possession of the personal effects and other property belonging to the deceased. Such request was entirely without prejudice to the respondent’s rights as to its sole beneficial and registered owner of the property. On the 26th July 1971 the solicitors for the appellant replied to the solicitors for the respondent stating that their client, the 1st appellant, was agreeable to permit access to the premises on the following conditions :–
The final paragraph of this letter read :–
It should perhaps be noted in view of the tone of this letter that at no stage has it been disputed that the respondent is at the least entitled to a one undivided half share in the premises and is the executrix of the owner of the other half share (if in fact the premises are in joint ownership). 11. It was under these circumstances and after further correspondence that the respondent issued her writ for possession and injunctions in terms similar to those sought by the summons. A number of possible defences to her claims have been adumbrated by the appellant. Firstly in his solicitors’ letter of the 17th July 1971 there are outlined two alternative defences which were scarcely compatible. The first was that he had paid to the deceased the “initial money” for the purchase of the properties and that he therefore had a beneficial interest in them. The second defence advanced was that he had, with the full knowledge and implied consent of the respondent, expended over $150,000 for improvements on the properties and he therefore claimed to enjoy an irrevocable licence or a licence coupled with an interest which had not been determined by reasonable notice. The precise nature of this licence was not discussed at length. Although proceedings were issued on the 9th September 1971 and service of them effected on the 13th September 1971, it was not until the 16th October 1971 when the 2nd appellant applied to be joined as a defendant that a third alternative defence, not wholly consistent with those earlier advanced, was outlined. This was to the effect that the 2nd appellant was at all material times a monthly tenant of the villa at a monthly rent of $1,700 exclusive of rates, and that the 1st appellant and the deceased had occupied the premises as the licensees of and directors in the 2nd appellant. This somewhat belated defence rested on a contention that the second appellant had regularly paid rent for the premises as was evidenced by entries in the books of account of the 2nd appellant and by rent receipts purportedly signed by the deceased, it being the case for the appellants that, the deceased having advanced half the purchase price of Dragon View, it had been agreed bwtween the deceased and the respondent that the deceased had been given full dominion over the villa including powers of letting, while the respondent in view of her interest had been allotted all the rents arising from the apartment house. The 1st appellant claimed that with the prior knowledge and consent of the respondent he acted as agent and collected the rents of the apartment house in the name, oddly enough, of the deceased rather than in the joint names of the deceased and the respondent. This arrangement, he claimed, lasted until July 1971 when the respondent caused letters to be written to the tenants of the apartment house asking them to pay rent to the solicitors. It is nowhere suggested that the respondent actually received the rents arising from the apartment house prior to July 1971. 12. A considerable portion of the time spent on the hearing of the appeal was taken up by a detailed examination of the 2nd appellant’s accounts in so far as they evidenced payment of rent to the deceased. I do not, however, intend in this judgment to examine in detail these matters. Suffice it to say, that I am satisfied, as clearly the learned judge was, that the defences adumbrated by the appellants are unlikely to succeed on the trial and that the respondent has made out a strong prima facie case likely to lead to her eventual success in the action. 13. In his judgment, the learned judge having examined the affidavits, goes on to say :–
The first question which he was putting to himself here was clearly whether the plaintiff had established a prima facie case that she had a title. The second and third questions might more properly have been whether by alleging the tenancy and the licence the defendant had outlined defences which lessened to a material degree the likelihood of the plaintiff’s eventual success. It is true that in the course of his judgment the learned judge did say :–
This was going further than he should have gone. It was, however, also going further than he needed to go in order to grant interlocutory relief. He appreciated full well he was not making any final finding of fact, and must have been satisfied, as indeed am I , on the affidavits, that the appellant had shown a good prima facie case and a strong likelihood that the defences adumbrated by the appellant would not succeed on the hearing. The 1st, 2nd, 3rd, 5th, and 6th grounds of appeal attack the learned judge’s conclusion on the question as to whether or not a good prima facie case and likelihood of success had been made out by the plaintiff and, therefore, do not call for further discussion. 14. It remains to be considered whether or not the learned judge in the court below acted properly in the exercise of his discretion in granting the injunction. The 4th ground of appeal was that the learned judge exercised his discretion wrongly in that there was no evidence of any urgency or of any irreparable damage actual or apprehended and that he failed to consider whether there was such urgency or damage. The 7th ground was that in making the orders which he did make he went beyond preserving the status quo of the parties and in effect disturbed the status quo in favour of the plaintiff in a manner not justified in the circumstances of the case. The 8th ground was that there was no evidence that the 1st and/or 2nd defendant had at any material time threatened to do any of the acts from which the first and second defendants were restrained. The 9th ground of appeal was that the balance of convenience favoured the refusal rather than the granting of any of the reliefs claimed. The 10th was that the effect of the said order was to grant to the plaintiff by way of interlocutory relief substantially the whole of the relief claimed in the action and that the circumstances did not justify such an order. In considering the grounds of appeal is so far as they relate to the exercise of discretion I consider that the most important question to deal with initially is the question of the status quo, that is to say the position pertaining as at the time of the death of the deceased, and up to and on the 10th July 1971. The deceased was admittedly in occupation of the premises; her child Diana was also in occupation. The respondent’s sister, Madam LAU Chow-wei, was admittedly in occupation. That occupation must have been by the licence of the respondent and Madam LAU Chow-wei’s occupation can properly be regarded as occupation by the respondent herself. The respondent herself had a room to which she could have gone had she wished. The 1st appellant was in partial occupation as a regular visitor to the deceased with the consent of the respondent. He, therefore, was the licensee of the respondent. Since Madam LAU Chow-wei was denied access to the premises by the appellant and indeed placed in a position where she did not see fit even to retrieve her clothes from them and since the gates were locked against both her and the respondent, who was a part owner of the property and the executrix of the other part owner, I consider that the status quo had clearly been disrupted by the action of the appellant. It is perhaps worthy of note that on no occasion has the 1st appellant challenged that even on his view of the facts the respondent was entitled at the least to an undivided half-share of the premises. Nevertheless he closed the gates against her, and sought to impose entirely unacceptable conditions on her proposed visit to the premises as executrix. These actions amounted to a rejection of all claims to ownership by her even of the moiety to which he admits she was entitled. This rejection and the conditions which the appellant’s solicitors sought to impose on her visit as executrix were in my opinion of such a nature as to create a situation which urgently required a remedy by way of interlocutory relief. 15. The appellants in order to show the absence of urgency in the application, have placed considerable stress on a statement contained in an affidavit sworn by the respondent on the 9th September 1971. This reads :–
I do not consider that the fact that the respondent has now no desire to live in the house necessarily removes the urgency from the situation. I will say no more lest I seem to usurp the function of the court which will finally hear this action. 16. When considering the question of irreparable damage, there was some discussion as to whether what had to be shown was “damage” or “injury” and if one uses those words in their technical meanings of damnum and injuria I think that what has to be shown is injury. Certainly it is sufficient to show a trespass : see, for example, Thompson v. Park([1]). This is not as strong a case as that was, but the action of the 1st appellant did constitute a trespass. The 7th ground of appeal is that in making the aforesaid order – and in particular, the first part of the aforesaid order – the learned judge went beyond restoring the status quo of the parties and in effect disturbing the status quo in favour of the plaintiff in a manner not justified in the circumstances of the case. There is no doubt that the status quo involved occupation by the appellant. However, it also involved occupation by the respondent’s sister and a right to access by the respondent, without, in any way, deciding who was responsible for the disagreement which occurred on the 10th and 11th of June. I consider that this disagreement and those which later took place indicate beyond doubt that joint access by both the appellant and the respondent’s sister is a practical impossibility if a breach of the peace is to be avoided. Furthermore by closing the gates and fixing new locks to them the defendant himself had shown unwillingness to preserve the status quo. Had the parties not been so completely at variance it is possible that the learned judge might have found some formula which would have enabled him to give some access to the 1st appellant with safeguards for the access which the respondent’s sister enjoyed before the 11th of June. However the attitude of the 1st appellant as disclosed in his own affidavits ruled this out. This attitude is particularly illustrated by his solicitor’s letter in reply to the respondent’s request for access as executrix particularly when it is appreciated that this letter was written prior to any claim to occupy as managing director of the second defendant under the tenancy so belatedly suggested. It was in these circumstances that the learned judge in the court below found it necessary to “disturb the status quo” in so far as it had not already been disrupted. 17. This reasoning must also have affected the exercise of the judge’s discretion in so far as the balance of convenience was concerned. There are many factors which will affect the balance of convenience and in family or quasi family disputes intangible factors are not the least of them. The learned judge had before him evidence that the 1st appellant had an alternative place of abode – and, indeed, an alternative primary place of abode. So, too, had the respondent but the respondent was denied all access to premises of which she was either the sole beneficial owner or, at the worst, the beneficial owner of one moiety and the owner of the other moiety as executrix. The learned judge recognised that “it is not ” in his own words “the practice of the court to grant an interlocutory injunction which will have the effect of granting the sole relief claimed.”. The 10th ground of appeal which deals with this question should scarcely form a separate ground of appeal as it appears from Manchester Corporation v. Connolly([2])that the fact that an interlocutory injunction will have the effect of granting the whole relief claimed is one of the factors to be considered when weighing the balance of convenience rather than regarded as a separate ground for refusing an injunction. Thus Diplock L.J. says at pp. 425 - 6 :–
The learned judge considered this factor in considering the balance of convenience. He decided this question of balance of convenience in the exercise of his descretion. I am very far from being able to say that he exercised his discretion so evidently on a wrong principle that what he did must be corrected. 18. Although the matter does not appear to have been argued at any length in the court below, counsel for the appellants before us took particular objection to the third injunction granted. His objection was that the appellant had never in any way threatened to remove, take, carry away, destroy, tamper with or dispose of in any way anything on the said premises. Counsel suggested that this was a “quia timet injunction”. I do not think there is any such animal. The phrase “quia timet” is used in connection with actions rather than injunctions, which are necessarily quia timet when prohibitory. However the nature of his objection was essentially that the respondent was premature in applying for this injunction. No removal had taken place and no removal was threatened. I think this objection is well taken. Injunctions, particularly interlocutory injunctions, should not be granted in terms wider than is necessary. This third injunction is not necessary to preserve the position of the respondent in default of proof that the appellant or his company have threatened or were likely to remove property that did not belong to them. I would therefore discharge this injunction. No special objection appears to have been taken in the court below, so far as I can determine from the judgment, to it. Argument concerning it in this court was in no way lengthy, and therefore the order which I would propose would be that this appeal be allowed only to the extent that the third injunction should be discharged. I would allow the respondent the costs in the court below and three-quarters of the costs in this court. 19. There is one final matter. The final paragraph of the judgment appealed from reads :–
[The words “should issue” are to be understood after the words “in terms of the application”]. The appellants complain that the respondent has failed to move for a speedy trial and indeed that her solicitors delayed in an essential preliminary to trial in that they failed to amend their statement of claim in accordance with leave which had been granted. That is not a ground for discharging the injunctions on this appeal – the appellants have their remedy – but I think it proper to remark that the legal representatives of parties should take scrupulous care to observe with the greatest particularity all the requirements impliedly or explicitly imposed on them by a judgment and particularly by one in interlocutory proceedings.
([1]) 1944 KB 404 ([2]) 1970 Ch. D. 420 |