TO CHIN SUN AND ANOTHER v. LI YING CHIM AND ANOTHER

DCCJ 400/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 400 OF 2016

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DECISION

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Introduction

1.  There are two applications: plaintiffs seek summary judgment against the 1^st defendant; the 1^st defendant applies for leave to amend the defence and counterclaim.

The plaintiffs’ claim

2.  The plaintiffs are all material times the registered owner of the remaining portion of Lot No 2748 in Demarcation District No 124, Tuen Mun, New Territories (“the Land”).  On 17 April 2014, the plaintiffs entered into a tenancy agreement as landlord with the 1^st defendant as tenant of the Land (and House 175A) for a term of 2 years commencing on 1 January 2014 at an annual rent of HK$3,000 for agricultural purpose (“the Tenancy Agreement”).

3.  Clause 8 of the Tenancy Agreement expressly provides,

“租約期滿而雙方未能訂立新租約時，乙方必須於租約期滿時立即將該地段無條件交吉於甲方[1]。”

4.  The tenancy expired on 31 December 2015.  The plaintiffs did not renew the tenancy with the 1^st defendant, in other words, he was required to deliver vacant possession on 1 January 2016 pursuant to Clause 8 of the Tenancy Agreement.  The 1^st defendant failed to do so and has been occupying the Land.

5.  Mr Leung, counsel for the plaintiffs submitted, the plaintiffs are seeking an order for vacant possession only and will abandon their claim for mesne profits.

The defence

6.  The 1^st defendant acted in person at time of filing his homemade defence.  The 1^st defendant did not dispute the existence of the Tenancy Agreement. He pleaded the Land was leased to him by the father of both the plaintiffs since 1984.  The father of the plaintiffs had continued to renew the lease and collected rent from the 1^st defendant from time to time.

7.  On 12 October 2015, Ms Ho, a representative of the plaintiffs, discovered there were people other than the 1^st defendant occupying the Land.  She indicated separate tenancy agreement may be signed for the 1^st defendant himself and other occupants. Having said that, the Tenancy Agreement has never been renewed.

8.  The 1^st defendant was aware the plaintiffs had commenced legal proceedings against him on 30 March 2016.

9.  The 1^st defendant claimed 1/3 of the Land was government land which does not belong to the plaintiffs.

The amendment

10.  The 1^st defendant was represented on 8 June 2016.  Solicitors for the 1^st defendant abandoned the original defence and had substituted a defence of promissory estoppel. It was pleaded, the father of the plaintiffs promised to lease the Land to the 1^st defendant for life at an annual rent of $500.  In reliance of such promise, the 1^st defendant and his family applied for and had obtained a licence from the District Office to build a residential home, now house 175A on the Land.  The 1^st defendant suffered detriment because he and his family have spent a considerable sum of money in building the house, it would be unconscionable for the plaintiffs to resile from their promise.

11.  Furthermore, in or about late 2014, whilst the representative of the plaintiffs paid visit to the Land, the representative misrepresented to the 1^st defendant that notwithstanding the terms of the Tenancy Agreement, the oral agreement with the father of the plaintiffs are still subsisting.

12.  The 1^st defendant counterclaims a declaration that the plaintiffs are not entitled to vacant possession.

Legal principles

13.  Summary judgment will be given for a plaintiff if a defendant has no bona fide defence to the plaintiff’s claim, and also in cases where no triable issues can be raised or no believable evidence in a defendant’s affirmation amount to a defence.  The court shall not embark on mini trial on affidavits.  The court must also be sure that there are no other reasons that the plaintiff’s claim ought to proceed for trial. (See commentaries of the Hong Kong Civil Procedure 2016, paragraphs14/4/1 - 14/4/3)

Analysis

14.  The 1^st defendant is replacing his homemade defence with a completely new one.  As expected, the 1^st defendant explained he was doing so for reason of legal advice.

15.  For effective analysis, I shall proceed on the basis to consider whether the new defence could establish a bona fide defence against the plaintiffs’ claim.  The 1^st defendant’s application should fall in event the new defence is unable to resist the plaintiffs’ application for summary judgment.

16.  The main obstacle of the 1^st defendant in both applications is the existence of the Tenancy Agreement.  It is a fixed term lease from 1 January 2014 until 31 December 2015.  It was in Chinese and was duly signed by the 1^st defendant.  There was no protest from the 1^st defendant after execution of the Tenancy Agreement.  In various hand written correspondence by the 1^st defendant, reference was made to the Tenancy Agreement itself without mentioning the alleged promise made by the late Mr To in light of a life tenancy.  It is worth noting that the homemade defence made no reference of the oral life tenancy granted by the late Mr To as well.

17.  To highlight a few correspondence referred to in paragraph 16 above, the following are exhibited in the 2^nd affirmation of To Chin Sun filed on 7 July 2016,

(i)    in a letter dated 17 December 2015, the 1^st defendant mentioned the progress of renewal of tenancy for the period of 2016 – 2017;

(ii)   in letters dated 30 December 2015 and 13 January 2016, the 1^st defendant complained the refusal of tenancy by the plaintiffs;

(iii)  in a letter dated 14 January 2016, the 1^st defendant agreed to procure the other occupants of the Land to enter into a new lease with the plaintiffs and the 1^st defendant agreed to a rent increase;

(iv)  in a letter dated 15 January 2016, the 1^st defendant proposed to pay rent at $20,000 per two years.  The 1^st defendant indicated he was reluctant to deliver vacant possession because of the redevelopment by the Government in the vicinity.

18.  Bearing in mind the court shall not to embark on mini trial on affidavits, the correspondence mentioned above defeated the 1^st defendant’s new defence.  Not only did the 1^st defendant fail to mention there was life tenancy granted by the late Mr To in 1984, the 1^st defendant reinforced the existence of the Tenancy Agreement while he was negotiating with Ms Ho, the representative of the plaintiffs for a renewal of tenancy.  

19.  The new defence of misrepresentation that the Tenancy Agreement is the same of the oral agreement of life tenancy does not amount to a bond fide defence.

20.  The reason being, the new defence of promissory estoppel lacks particulars, it was pleaded in vague terms.  As laid down in Lou Xing Juan v Estate of Hui Shui Yee (2009) 12 HKCFAR 1, the principles of promissory estoppel was revisited in paragraph 55-57 of the judgment, which can be summarized as follows:-

(i)    The parties were in a relationship involving enforceable or exercisable rights, duties or powers;

(ii)   one party (the promisor) by words or conducts, conveyed or was reasonably understood to convey a clear and unequivocal promise or assurance to the other (the promisee) that the promisor would not enforce or exercise some of those rights, duties or powers;

(iii)  the promise reasonably relied upon that promise and was induced to alter his position or unconscionable for the promisor to act inconsistently with the promise;

(iv)  each element does not exist in its own watertight compartment to be kept separate from the others.  Each element acquires its meaning and content in the context of the other elements.

21.  Should there be a promise made by the late Mr To for life tenancy, the 1^st defendant still, pleaded vaguely on the element of reliance or detriment.  In paragraph 3.5 of the new defence, the 1^st defendant pleaded he and his family applied for and had obtained a licence from the District Land Office to build a residential home on the Land.  No particulars of such licence were noted.  It is expected, the category of the licence, the licence number or at least the issuing office of the licence should be displayed.  Moreover, in the same paragraph, the 1^st defendant pleaded he and his family has spent a “substantive amount of money on laying foundation and formation works” of the Land to erect House 175A on the Land.  I see this is again a general statement without particulars.  I came to a view that the new defence of promissory estoppel is merely bare assertions.

22.  Putting the defence to its highest, even an oral tenancy for life was granted by the late Mr To to the 1^st defendant, it has already been determined by the execution of the Tenancy Agreement.  Section 6 of the Conveyance and Property Ordinance, Cap 219 reads,

“All interests in land created by parol and not put in writing and signed by the persons creating the same, or by their agents thereunto lawfully authorized in writing, have, notwithstanding any consideration having been given for the same, the force and effect of interests at will only.” [emphasis added]

23.  The correspondence exposed the 1^st defendant’s intention to remain on the Land as long as he could because of the on-going redevelopment by the Government.  

24.  The new defence of (i) promissory estoppel where the late Mr To, father of the plaintiffs had promised the 1^st defendant of a life tenancy; and (ii) misrepresentation on the part of the representative of the plaintiffs in executing the Tenancy Agreement were is far from sufficient in establish a bona fide defence against the plaintiffs’ claim.

25.  I have no hesitation to conclude the summary judgment should be granted to the plaintiffs.  The 1^st defendant’s application to amend the defence and counterclaim is refused.

26.  I am given to understand the plaintiffs had abandoned their claim and relief on mesne profit of the Land.

Conclusion

27.  I therefore make the following orders:-

(i) Final judgment be entered for the plaintiffs against the 1^st defendant.  The 1^st defendant do deliver vacant possession of the Land to the plaintiffs.

(ii) The 1^st defendant’s summons filed on 8 June 2016 be dismissed.

(iii) The costs of the plaintiffs’ claim, including the plaintiffs’ summons filed on 23 May 2016, be payable by the 1^st defendant to the plaintiffs, with certificate for counsel, to be taxed if not agreed.

(iv) The costs of the 1^st defendant’s summons filed on 8 June 2016 be payable by the 1^st defendant to the  plaintiffs, with certificate for counsel, to be taxed if not agreed.

(v) The plaintiffs do apply for further case management directions with regard to their claim against the 2^nd defendant by way of case management summons before a Master of the District Court within 28 days from the date of this decision.