CHAN HAU LING v. 劉西 AND ANOTHER

HCA 1286/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1286 OF 2012

_________________

_________________

_________________________

J U D G M E N T

_________________________

I. Introduction

1.  The Plaintiff’s claims against the Defendants are for an order of vacant possession of a residential property known as Flat H, 21^st Floor, Fu Tien Mansion, Horizon Gardens, 13 Taikoo Wan Road, Taikoo Shing, Hong Kong (“Property”) and mesne profits from 1 July 2010 until delivery of vacant possession.

II. The Facts

2.  The registered owner of the Property is and at all material times was Madam Suthiwan Asavaprecha (“SA”), an old lady of Thai origin.

3.  SA is said to have a godson Mr Lau Fung (“LF”) who at one stage resided with SA in the Property. By mid-1999, when the Plaintiff was introduced to LF, he was living in the Property alone. The Plaintiff has never met SA. No one knows when SA moved out of the Property, where she has gone or where she is now.

4.  LF is an ethnic Chinese from Thailand. He was a businessman and often traveled between Hong Kong, Mainland China and Thailand. Apparently, he is not married and has no children.

5.  The Plaintiff was born and brought up in Mainland China.  In 1993, she came to settle down in Hong Kong with her daughter.  Through the introduction of a friend, she came to know a medical doctor by the surname 溫 (“Dr Wan”) and started working in his clinic as assistant nurse. Through Dr Wan, the Plaintiff came to know one of his friends by the surname  羅  (“Dr Law”), PW2 in the present case.

6.  Dr Law is also an ethnic Chinese from Thailand. He received his secondary and university education in Mainland China. In the 1960s, he settled down in Hong Kong, obtained his medical qualifications and commenced his medical practice here. Dr Law is a long-time friend of LF – they came to know each other while studying in the same secondary school in Mainland China.

7.  In mid-1999, the Plaintiff was living in a rented room in an apartment in Taikoo Shing. She was unhappy with where she was and started looking for some place else. Dr Law knew about this and mentioned to Dr Wan that LF was looking for a tenant to take up one of the rooms in the Property. This was because LF often had to travel on business and was hoping that while he was away, someone reliable could look after the Property for him.

8.  In June 1999, through the introduction of Dr Law, the Plaintiff met LF for the first time at the Property. Since Dr Law was a trusted friend, LF agreed to let the Plaintiff live in the Property for a monthly rent of HK$3,000, inclusive of all utilities charges which would be borne by LF. There are three bedrooms in the Property – one ensuite master bedroom (“master bedroom”) and two smaller bedrooms. At first, the Plaintiff moved into one of the smaller bedrooms. Subsequently, with the agreement of LF, she moved into the master bedroom. 

9.  In October 2002, LF told the Plaintiff that he was about to go to Thailand on business and might not be back for a while.  He asked the Plaintiff to look after the Property for him. After LF’s departure, the Plaintiff, as well as her daughter, continued to live in the Property. While the Plaintiff has stopped paying rent to LF, she has paid management fees in respect the Property. 

10.  LF has not returned ever since. Like SA, no one really knows where he has gone or where he is now. Dr Law has tried to get in touch with him but without success.

11.  In June 2003, the Plaintiff and her daughter moved out of the Property and into her present residence which is public subsidised housing. Nevertheless, the Plaintiff has left behind some of her personal belongings and furniture. Her explanation for moving out was that a Mr Leung Heung Yeung (“Mr Leung”) claimed LF owed him money and asked for LF’s whereabouts. Mr Leung repeatedly called the Plaintiff to look for LF and later threatened to move into the Property to wait for him. The Plaintiff said she was annoyed by such threatening calls and was concerned about her own and her daughter’s safety. So she decided to move out of the Property for the time being, but she still kept the key and her resident card. She also regularly visited the Property and collected mails.

12.  As a matter of fact, the Plaintiff never moved back to the Property. She has also stopped paying management fees since June 2003.

13.  One day in early October 2008, the Plaintiff was informed by the management office of Taikoo Shing that there was a complaint of water leakage from the Property. She immediately went back to the Property and discovered the floor had been flooded and the salt water pipe in the bathroom had burst. She asked the management office to arrange for workers to clean up the mess. She said she was worried LF would blame her for failing to take good care of the Property when he came back. On the other hand, as the Plaintiff has not paid management fees since June 2003, the arrears of management fees together with interest and related legal costs (“Arrears”) had run up to over HK$173,000 by November 2008. At that time, the management company had instructed a firm of solicitors and threatened to take legal action to sell the Property pursuant to the terms of the Deed of Mutual Covenant governing the Taikoo Shing estate. 

14.  It was against this background that the Plaintiff went to the 1^st Defendant for help. The 1^st Defendant is a friend of the Plaintiff. They have known each other for over twenty years. He told this court he ordinarily resided in Mainland China, although he would come to Hong Kong from time to time and stay here on a temporary basis.

15.  What was discussed between the Plaintiff and the 1^st Defendant is a matter of serious contention.

16.  The Plaintiff said she was concerned that if she paid for the Arrears and the costs of remedying the water damage to the Property (“Remedial Costs”), she might not be able to recoup them from LF. She also told the 1^st Defendant she intended to leave Hong Kong for a period of time to visit her daughter who was then in Australia. The 1^st Defendant, having appraised of the Plaintiff’s situation, offered to help by paying for the Arrears and the Remedial Costs in return for the Plaintiff letting the Property to him and his elder sister. The Plaintiff, thinking the offer had the advantages of clearing up all Arrears and ensuring the water damage to the Property would be remedied at no costs to her, agreed to the 1^st Defendant’s proposal. She said she would let the 1^st Defendant stay in the Property for up to 30 June 2010 and the 1^st Defendant agreed. The duration was arrived at by adding the Arrears and the estimated Remedial Costs of HK$150,000 together, and then divided the sum by a notional rent of HK$18,000 a month.

17.  The 1^st Defendant’s version of event is very different.

18.  As pleaded in paragraphs 6 and 8 of the Amended Defence, what happened was as follows.

19.  In about September 2008, as the Property had been uninhabited for no less than 5 years, it was left in a state of poor repair and arrears of management fees had accumulated to over HK$150,000. The Manager of Taikoo Shing was intending to sell the Property unless the said arrears of management fees and the related legal costs were settled. The Plaintiff mentioned the intended sale of the Property to the 1^st Defendant and told him that the Property did not concern her at all, that  she had no interest in it and would not pay any money for it. The Plaintiff suggested to the 1^st Defendant to take up the Property and settle the said arrears of management fees; otherwise, the Property would be sold by the Manager. In reply, the 1^st Defendant indicated that he would pay up the arrears of management fees if the Manager of Taikoo Shing would accept him as a resident. In light of the aforesaid, in about November 2008, the Plaintiff abandoned possession of the Property, and the 1^st Defendant then entered into possession of the same.  On or about 18 November 2008, the 1^st Defendant paid to the Manager the sum of HK$173,988, being the arrears of management fees and related legal costs. Since then, the 1^st Defendant has been in exclusive possession of the Property, renovated the same and discharged all costs and expenses, as if he was the sole owner.

20.  The 2^nd Defendant is the husband of 麥婉碧 (“Madam Mak”). Madam Mak used to work under the 1^st Defendant in a company which has long ceased operation. In January 2009, with the agreement of the 1^st Defendant, the 2^nd Defendant and Madam Mak moved into the Property and have lived there ever since. In return, the 2^nd Defendant paid a monthly sum of HK$9,000 to the 1^st Defendant and was responsible for the management fees, rates and other utilities charges of the Property.

21.  There is no suggestion that the 2^nd Defendant moved into the Property with the Plaintiff’s consent or even knowledge. In fact, it was pleaded in paragraph 12 of the Amended Defence that the 2^nd Defendant has been occupying the Property as the 1^st Defendant’s licensee without the Plaintiff’s consent. The Plaintiff said it was only in mid-2010 that she was first told by the 1^st Defendant that the 2^nd Defendant and his family were living in the Property.

III. The Plaintiff’s case

22.  In the amended Statement of Claim, and as clarified in Mr Szeto’s closing submissions, the Plaintiff’s case is framed on two alternative bases.

23.  First, on or about 1 November 2008, the Plaintiff orally agreed with the 1^st Defendant that:

(1) The 1^st Defendant shall settle the Arrears in the total sum of HK$173,988.

(2) The 1^st Defendant shall remedy the water damage to the Property and bear the Remedial Costs then estimated to be around HK$150,000.

(3) The 1^st Defendant shall be entitled to possession of the Property from 1 November 2008 to 30 June 2010.

(4) The 1^st Defendant shall re-deliver possession of the Property to the Plaintiff on or before 1 July 2010.

(5) The 1^st Defendant shall pay the Plaintiff a notional monthly rent of HK$18,000 by amortizing the Arrears and Remedial Costs.

(6) The 1^st Defendant shall be solely responsible for the management fees of the Property from 1 November 2008 to 30 June 2010.

(“Oral Agreement”)

24.  Second, by an oral agreement made on or about 1 November 2008 between the Plaintiff as principal tenant and the 1^st Defendant as sub‑tenant, the Plaintiff agreed to let and the 1^st Defendant agreed to take a sub‑tenancy of the Property from 1 November 2008 to 30 June 2010 (“Oral Sub-tenancy”) at a notional monthly rent of HK$18,000. The 1^st Defendant paid the said notional rent up to 30 June 2010 by amortizing the Arrears and Remedial Costs.

25.  Upon the expiry of the Oral Agreement alternatively the Oral Sub‑tenancy, the Plaintiff was entitled to possession of the Property as from 1 July 2010. In breach of the Oral Agreement alternatively, the Oral Sub‑tenancy, the 1^st Defendant has failed to deliver up the Property to her. Further, despite repeated demands, the 2^nd Defendant has also failed to deliver up the Property to her.

IV. The Defendants’ case

26.  Apart from denying the Oral Agreement and the Oral Sub‑tenancy as mere fabrication as well as the Plaintiff’s locus to sue, the Defendants’ case is simply this. In November 2008, the Plaintiff abandoned possession of the Property (“Abandonment”). Since then, the 1^st Defendant has been in exclusive possession of the Property. He has also paid the Arrears in the sum of HK$173,988 to the management company and renovated the Property at his own costs. As for the 2^nd Defendant, he moved into the Property with his family as the 1^st Defendant’s licensee, without the Plaintiff’s consent, and has lived there since about January 2009: paragraphs 8 to 12 Amended Defence.

27.  What is not in dispute however is that it was only after the 1^st Defendant had settled the Arrears at the solicitors’ office on 18 November 2008 that the Plaintiff gave him the key to the Property and assisted him in applying to Taikoo Shing’s management office for resident cards.  In other words it was the Plaintiff who let the 1^st Defendant into possession of the Property.

28.  Mr Koo submits to this court that once the Plaintiff has abandoned possession of the Property, she no longer has locus to recover possession of it: paragraph 7 of Defendants’ Closing Submissions. He further submits that the “Abandonment” took place when the Plaintiff gave the key of the Property to the 1^st Defendant. Thereafter, only SA and/or LF can claim possession against the 1^st Defendant or any other trespasser: paragraphs 3 and 6 of Defendants’ Reply submissions.  

V. The Plaintiff’s right to sue

29.  In an action for recovery of land, also known as ejectment, a plaintiff must establish a right to possession based on the strength of his title: Clerk & Lindsell on Torts 20^th Ed. para. 19-71.

30.  Under the common law principle of relativity of title, the person in possession of land acquires important rights which are good against all the world, except those who are able to claim a better title.

31.  In Asher v Whitlock (1865) LR 1 QB 1, a plaintiff with a better title than the defendant recovered possession of a piece of land although neither party had a title against the lord of the manor. At p 5, Cockburn CJ said:

“But I take it as clearly established, that possession is good against all the world except the person who can shew a good title; and it would be mischievous to change this established doctrine. In Doe v Dyeball [Mood. & M. 346] one year’s possession by the plaintiff was held good against a person who came and turned him out; and there are other authorities to the same effect. Suppose the person who originally inclosed the land had been expelled by the defendant, or the defendant had obtained possession without force, by simply walking in at the open door in the absence of the then possessor, and were to say to him, “You have no more title than I have, my possession is as good as yours,” surely ejectment could have been maintained by the original possessor against the defendant.” (emphasis added)

32.  More recently, in Ocean Estates Ltd v Pinder [1969] 2 AC 19 at 25A-B, Lord Diplock observed:

“Where questions of title to land arise in litigation the court is concerned only with the relative strengths of the titles proved by the rival claimants. If party A can prove a better title than party B he is entitled to succeed notwithstanding that C may have a better title than A, if C is neither a party to the action nor a person by whose authority B is in possession or occupation of the land.”

33.  Since title to land is relative, a plaintiff may show a better title by inter alia his possession prior to that of the defendant: Clerk & Lindsell on Torts 20^th Ed. para. 19-71. This is amply demonstrated by the example used by Cockburn CJ in the passage above.  The common law has adopted the notion of title by first occupancy and held that possession, even if lost, gives rise to a right to recover it since as between mere possessors, prior possession is a better right: Gray Elements of Land Law 5^th Ed. para. 2.1.37; Mabo v Queensland (No. 2) (1992) 175 CLR 1 at 210.

34.  As Toohey J put it in Mabo v Queensland (No. 2) supra at 210-1:

“The better understanding is, I think, that if no other factors come into play, then, regardless of the length of time, as between mere possessors prior possession is a better right. Possession is protected against subsequent possession by a prima facie right of entry.

The proposition that possession of itself gives rise to a right in the plaintiff to recover possession, if lost, is supported by principle. In losing possession, a plaintiff has lost the rights associated with possession, including the right to defend possession as well as an estate in the land. But nothing has upset the presumption that the plaintiff’s possession, and therefore his or her fee simple, was lawfully acquired and hence good against all the world. “Possession is prima facie evidence of seisin in fee simple”. Without evidence to the contrary, nothing has displaced the presumption arising from proof of the plaintiff’s possession that he or she had lawful title amounting to a fee simple. Thus, although a dispossessed plaintiff in ejectment must prove the strength of his or her own title and cannot rely on the weakness of the defendant’s title, the presumption of lawfulness arising from prior possession is positive evidence in that regard.

It follows from this, however, that a person’s title arising from prior possession can be defeated either by a defendant showing that he or she (or another person, in so far as it undermines the plaintiff’s claim) has a better, because older, claim to possession or by a defendant showing adverse possession against the person for the duration of a limitation period.

In sum, English land law, in 1879 and now, conferred an estate in fee simple on a person in possession of land enforceable against all the world except a person with a better claim.” (emphasis added)

35.  In the present case, it is indisputable that the Plaintiff occupied the Property prior to the Defendants. On the Plaintiff’s evidence, which is un‑contradicted, she started residing in the Property in about June 1999. In this court’s view, it is not necessary to determine whether the Plaintiff occupied the Property as a licensee or as a tenant of LF, for two reasons. 

36.  First, it was held by the English Court of Appeal in Manchester Airport Plc v Dutton [2000] 1 QB 133 that a licensee with a right to occupy land, whether or not in actual occupation, was entitled to bring an action for possession against a trespasser in order to give effect to his rights under the licence. The licensee’s claim for possession against a trespasser would not be defeated by the fact that he enjoys no right of exclusive possession as against the licensor: per Laws LJ in Manchester Airport Plc v Dutton at 147D-E.

37.  Second, whether or not the Plaintiff first occupied the Property as a mere licensee, since the disappearance of LF in October 2002, she has been in exclusive de facto possession of the Property and I shall so find.

38.  Suppose a stranger broke into the Property, no one can seriously doubt the Plaintiff would have recourse in a court of law for recovering possession from the stranger.  Similarly, if a friend was allowed by the Plaintiff to enter the Property for a period of time and he overstayed his welcome, the Plaintiff would be entitled to evict him by instituting legal proceedings. The friend was in the position of a licensee and if he exceeded the scope of the permission given to him, he became a trespasser in the eyes of the law: Hillen v Pettigrew v ICI (Alkali) Ltd. [1936] AC 65, 69; Tomlinson v Congleton BC [2004] 1 AC 46 at [56].

39.  To conclude, this court is of the firm view that, subject to the so‑called defence of “Abandonment”, the Plaintiff has the necessary locus to sue for recovery of the Property.

VI. The Defence of “Abandonment”

40.  The legal basis of this “Abandonment” defence to an action for ejectment is highly obscure. Despite repeated requests, Mr Koo has failed to produce a single authority which supports the existence of such a defence.

41.  If, by “Abandonment”, all that the Defendants meant to do is to dispute the Plaintiff’s possession or her right to possession of the Property, in other words, the Plaintiff’s right to sue for ejectment, then this defence has already been dealt with in Section V above.

42.  This court only wishes to add these.

43.  First, this court finds the following facts as being established on the evidence.

(1) When the Plaintiff moved out of the Property, she had locked up the Property, kept the key and left some of her personal belongings in it. Since then, she has regularly visited the Property.

(2) After moving out, the Plaintiff continued to regard herself as responsible for the upkeep of the Property. For instance, the Plaintiff immediately went back to the Property when she was informed of the water leakage in October 2008. She also tried to persuade the 1^st Defendant to pay for the costs of repair of the water damage.

(3) After moving out, the Plaintiff continued to keep a dialogue with Taikoo Shing’s management company in order to avoid a forced sale of the Property by reason of the non-payment of management fees.

(4) When Taikoo Shing’s management office threatened to take legal action in 2008 to sell the Property, the Plaintiff tried to persuade the 1^st Defendant to settle all the Arrears in order to avoid the forced sale.

44.  Second, this court agrees with Mr Szeto that the above facts as found by this court were inconsistent with the proposition that the Plaintiff has abandoned the Property. If the Plaintiff were minded to “abandon” the Property, she would have done none of the above. Instead, she would simply have left the management company to take action to sell the Property as it saw fit. Further, she would not have bothered to look for funding to cover the costs of repair of the Property. 

45.  To conclude, in the view of this court, not only is the defence of “Abandonment” untenable in law, it is also not borne out by the facts as found by this court.

VII.    Oral Agreement/ Sub-tenancy

46.  Whether one describes it as Oral Agreement or Oral Sub‑tenancy, the crux of the Plaintiff’s factual case is premised on an oral agreement with the 1^st Defendant in October/November 2008 pursuant to which he was given possession of the Property.

47.  While the Defendants deny the existence of any agreement with the Plaintiff, such denial is in this court’s view wholly unrealistic. The Property is a valuable property and its market rental was close to HK$28,000 a month in 2010, on the evidence of PW3. The undisputed fact is that it was the Plaintiff who gave the key of the Property to the 1^st Defendant after he had agreed to and did pay off the Arrears. It stands to reason that there was an agreement between the two at least to the effect that the 1^st Defendant would settle the Arrears in return for the Plaintiff allowing him possession of the Property and I so find. The 1^st Defendant’s denial of it is wholly incredible and I reject his evidence.

48.  As this court sees it, the task of this court is to ascertain what else was agreed between the Plaintiff and the 1^st Defendant at the time.

49.  On the 1^st Defendant’s evidence, nothing was agreed. His evidence was that since the Plaintiff has been granted public housing, she wanted to rid herself of the “burden” of the Property, including the responsibility for settling the management fees and generally looking after it. Hence, she let the 1^st Defendant have the key to the Property after he paid off the Arrears, period. This in gist is the Defendants’ case of “Abandonment”.

50.  This court has carefully considered the testimony, as well as the demeanour, of both the Plaintiff and the 1^st Defendant and assessed it against the known and undisputed surrounding circumstances of this case. This court has in particular considered the inherent probabilities or otherwise of the parties’ respective contentions, and assessed the witnesses’ credibility accordingly.

51.  This court has no hesitation in rejecting the 1^st Defendant’s evidence. This court finds as a fact what was agreed between the Plaintiff and the 1^st Defendant was this: in return for the 1^st Defendant settling the Arrears and repairing the water damage to the Property at his own expenses, the Plaintiff agreed to let him have possession of the Property until mid 2010. The reasons are these.

52.  In October/November 2008, neither the Plaintiff nor the 1^st Defendant knew for certain when SA or LF might show up and seek to recover the Property. While the Plaintiff wanted to persuade the 1^st Defendant to settle the Arrears and bear the Remedial Costs, she could not have agreed to let him stay in the Property indefinitely and the 1^st Defendant was well aware of that. When asked by this court, the 1^st Defendant frankly admitted as much. At most, the Plaintiff could only have agreed to let him stay in the Property for a sufficiently long period to make it worth his while. From her point of view, since the 1^st Defendant was someone she had known for a long time, she felt a degree of assurance that he would move out of the Property when asked to.

53.  This court finds the 1^st Defendant an intelligent man. He knew he was taking his chances when he agreed to settle the Arrears and bear the Remedial Costs. He therefore hedged his risks by letting the 2^nd Defendant (and his family) move into the Property for a monthly sum of HK$9,000. In addition, the 2^nd Defendant had to bear the management fees, rates and all utilities bills. While HK$9,000 were well below the market rental of the Property, in this way, the 1^st Defendant enjoyed a steady monthly income and did not have to incur further expenses on the Property.

54.  This court further finds as a fact that in early 2010, the Plaintiff did ask the 1^st Defendant to re-deliver the Property to her on or before 1 July 2010 and when met with this request, the 1^st Defendant did not resist as such. This is borne out by some of the 1^st Defendant’s SMS messages adduced in evidence. One of the messages was to the effect that the 1^st Defendant would not refuse to leave the Property. Instead, the 1^st Defendant kept putting forward the excuse that the 2^nd Defendant needed time to arrange for alternative accommodation. In his witness statement at paragraph 6, the 2^nd Defendant also admitted that in mid 2010, he was told by the 1^st Defendant that the Plaintiff had demanded to recover the Property.

VIII.  Estoppel against 1^st Defendant

55.  The Defendants accept that if this court finds in favour of the existence of an Oral Agreement or Oral Sub-tenancy, both Defendants will have no defence to the Plaintiff’s claim: paragraph 13 Defendants’ Opening Submissions.  

56.  Mr Szeto submits that since the 1^st Defendant was given possession of the Property by the Plaintiff upon terms, it matters not whether this court finds the relationship between the Plaintiff and the 1^st Defendant was one of landlord and tenant, or one of licensor and licensee. This is because the doctrine of estoppel applies between licensor and licensee, as it does between landlord and tenant.

57.  This court agrees.

58.  In Tang Man Kit and Foo Tak Ching v Hip Hing Timber Co Ltd. unrep. CACV No. 137 of 2002; Cheung JA, Yeung JA (as he then was) & Chung J; 13 May 2005, the question arose as to whether the Managers of Wah Yan Mo Fan Heung (“Heung”) had title to sue to recover part of the land owned by the Heung but leased to the defendant upon its determination. The Court of Appeal dealt with this aspect of the case as follows:

“Title irrelevant

48. The present case, however, is not concerned with the question of title of the managers. It is concerned with their capacity to sue to recover the land. The question of title by registration is irrelevant. As correctly pointed out by Mr. Anthony Neoh SC who together with Mr. Ernest Koo appeared on behalf of the plaintiffs, the person who is entitled to recover land rests on his right to possession of the land and not on his right to pass title to a third party… …

50. The land was let by Mr. Wong Tat To as manager of the Heung in 1966 to the defendant as a yearly tenant. The Defendant had refused to deliver back the land to the Heung after the expiration of the notice to quit thereby trespassing on the land. The then current managers then commenced the proceedings against it to recover the land. I just do not see how in the circumstance the defendant could possibly argue that the plaintiffs have no right to bring the proceedings.

Two principles

51. Two principles of law come into play. First, an action for trespass can be maintained by someone in possession of the land: see Halsbury’s Laws of England (4th Ed.) Vol. 45 Paras 1396 and 1397. Second, estoppel by tenancy will preclude the defendant from raising this defence.

Estoppel

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 at 596:

‘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.’ ”

59.  In Government of the State of Penang v Beng Hong Oon [1972] AC 425, at 433 E-F, the Privy Council advised that:

“There is no doubt that under English law as it stood in 1872 and stands today there was and is no difference as regards the matter in hand between a tenant and a licensee. Each is estopped from denying the title of the person from whom he accepted the tenancy or licence so long as he remains in possession under it.”

60.  Once it is established that there was a landlord and tenant alternatively licensor and licensee relationship between the Plaintiff and the 1^st Defendant, the estoppel kicks in and the 1^st Defendant cannot resist the Plaintiff’s claim to recover possession of the Property.

61.  The 2^nd Defendant, being the 1^st Defendant’s licensee and hence claiming through him, has no better right to stay on the Property than the 1^st Defendant. Hence, the 2^nd Defendant also cannot resist the Plaintiff’s claim to recover possession of the Property.

IX.     The claim for mesne profits

62.  The last question for this court is the assessment of the mesne profits payable.

63.  At trial, only the Plaintiff has adduced expert evidence on the market rental of the Property from 1 July 2010 to 30 September 2014 (date of the survey report).

64.  This court has carefully considered the expert report of Mr Keith Siu and is satisfied with his methodology, the suitability of the comparables he used as well as the various adjustments he made to take into account what he described as the “Time”, “Floor”, “View” and “Size” factors.

65.  Mr Siu’s conclusion is that the market rental of the Property subject to vacant possession but inclusive of Government rate and management fee from 1 July 2010 to 30 September 2014 is HK$1,515,000 calculated as follows:

66.  In his closing submissions, Mr Koo criticized the Plaintiff’s expert for unjustifiably rounding up the figures of market rental from HK$27,504 to HK$28,000, from HK$30,560 to HK$31,000 and from HK$32,852 to HK$33,000 respectively.

67.  This court does not accept the criticism. Valuation is an art, not an exact science, and it seems to this court entirely proper for the Plaintiff’s expert to round up the figures, if only because that is what landlords and tenants normally do when they agree on a figure as the monthly rent. Indeed, from experience, it would be rare to find tenancy agreements which set the monthly rental at such odd figures as HK$27,504 or HK$32,852 and so on.

68.  Mr Koo’s next point has more substance. He submitted that in the present case, the management fees and government rates were paid not by the Plaintiff but by the 2^nd Defendant and hence the market rental of the Property should be exclusive and rather than inclusive of the two.

69.  This court agrees. It is common sense that if, as between a landlord and a tenant, the landlord is responsible for paying management fees and government rates, he would be able to command a higher rent than would otherwise be the case. Since Mr Siu’s conclusion is premised on the hypothetical landlord being responsible for management fees and government rates, this court would have to make a downward adjustment to take into account the fact that the premise was inapplicable to the present case. This is accepted by Mr Szeto.

70.  In the “Plaintiff’s Supplemental Submissions on the Appropriate Discount for the Market Rent of the Subject Property”, Mr Szeto has put forward three different calculations of the mesne profits claimed in order to cater for above. This court is minded to adopt the calculation which gives the largest discount to the market rental ie Scenario A as follows:

71.  Mesne profits will continue to accrue at the rate of HK$30,840 per month until delivery up of the Property.

X. Disposition and costs order nisi

72.  In the premises, this court finds in favour of the Plaintiff and makes the following orders.

(1) The 1^st and 2^nd Defendants do deliver up vacant possession of the Property to the Plaintiff within 56 days from the date hereof. 

(2) Judgment be entered against the 1^st and 2^nd Defendants, under paragraph 70 above, in the sum of HK$1,404,840 together with interest at 1% above the prevailing Hong Kong dollar prime lending rate from 1 July 2010 to the date of judgment.  Thereafter, interest will be payable at the judgment rate until payment.

(3) The 1^st and 2^nd Defendants do pay the Plaintiff, under paragraph 71 above, the sum of HK$30,840 per month, from 1 October 2014 until the delivery up of vacant possession of the Property, together with interest at 1% above the prevailing Hong Kong dollar prime lending rate from 1 October 2014 to the date of judgment.  Thereafter, interest will be payable at the judgment rate until payment.

(4) Liberty to apply.

(5) There will be an Order Nisi that the Plaintiff is to have the costs of the action against the 1^st and 2^nd Defendants to be taxed if not agreed.