TONG PAK LUNG v. TONG CHOI YUEN

HCSA 59/2024

[2026] HKCFI 885

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO. 59 OF 2024

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J U D G M E N T

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A.  BACKGROUND

1.  This is an appeal from the Small Claims Tribunal (“the Tribunal”, and its decision dated 31 October 2024 (“Decision”). The Applicant and the Respondent are siblings. Their late father (“the Father”) left 3 properties to them before he passed away. They are Shop Nos. 29, 30, and 42 of the Chungking Mansions in Nathan Road (respectively “Shop 29”, “Shop 30”, and “Shop 42”, and collectively “the 3 Shops”).

2.  The Father left 40% of the beneficial interest in the 3 Shops to his wife, and 20% to each of his 3 children. After the death of the Father, from 1 January 2014 onwards, the Respondent has been collecting the rent for the 3 Shops. The Applicant immigrated to Canada since 1989 and came back to Hong Kong in 2017. He claimed from the Respondent his share of the rent of the 3 Shops.

3.  In gist, the Applicant’s case in the Tribunal below was that the Respondent has failed to give him his share of the rent. During the proceedings the Applicant alleged, inter alia, that the Respondent defrauded IRD, defrauded him of his tax allowance, his share of rent, forged his signature, and defrauded the tenants of the 3 Shops [Decision §7-9].

4.  The Respondent’s case, in gist, was that she had already given him an account of the rent collected and was willing to pay him based on those accounts. It was the Applicant who insisted that the account she gave was not correct and pestered her for payment, even though she would have paid him without needing him to bring a claim in the Tribunal [Decision §11].

5.  In addition, the rent in respect of Shop 42 had been settled and the Applicant had acknowledged receipt by signing.

6.  The Respondent made an open offer to settle, i.e. to pay the Applicant the rent of Shop 29 and Shop 30 collected from 1 January 2015 to 31 December 2021, which included sums of rent which were time-barred and thus exceeded what the Applicant could legally claim (“the Settlement Offer”). The Applicant turned down this Settlement Offer [Decision §12].

7.  The Deputy Adjudicator identified the Applicant’s claim to be a claim for the Applicant’s outstanding share of rent that the Respondent had collected from the tenants of the 3 Shops, all from 1 January 2014 to 1 September 2021 [Decision §9].

8.  The Deputy Adjudicator further identified 3 main issues [Decision §22]:

(1)  Whether the Applicant had received his share of rent from Shop 42, and if so, whether he could still claim the rent from Shop 42 notwithstanding such receipt?

(2)  Whether parts of the claimed rent of the 3 Shops were time barred. If so, whether the Applicant could still claim the amount that was time barred?

(3)  If the Applicant had received his share of rent from Shop 42, what was his share of rent for Shops 29 and 30?

9.  On the first issue, the Deputy Adjudicator found that the Applicant had, on 17 August 2021 received $60,239.94, being his share of rent from 2015 to 2021 for Shop 42, pursuant to a settlement agreement in relation to Shop 42 [Decision §12, 26].

10.  The Applicant argued that the sum paid under the settlement agreement was incorrect as it did not take into account his personal tax allowance.

11.  The Tribunal disagreed. After receipt of the rent for Shop 42 for 2014/15, the Applicant had applied to the Inland Revenue Department (“IRD”) and was granted a tax allowance of $4,500. Therefore, the Applicant should have known that if he wanted tax allowance, he must apply to the IRD. His assertions that in coming to the settlement agreement on Shop 42, the Respondent had defrauded him, or had made misrepresentations, were not established.

12.  The Tribunal found the Applicant to be an unreliable witness and did not accept other aspects of his evidence either. His allegations of fraud against the Applicant, fraud against the IRD, and fraud against the tenants were not established.

13.  On the second issue, the Tribunal applied section 4(2) of the Limitation Ordinance, Cap. 347 (“LO”) and found that his claim for payment of the rent received from the 3 Shops between 1 January 2014 to 30 August 2015 was time-barred. She limited his claim to the period spanning from 1 September 2015 to 1 September 2021 [Decision §37, 39]. The Tribunal also found that the Applicant could not avail himself of the fraud exception to the limitation period under section 26 of the LO given that his fraud allegations were not supported by evidence [Decision §38].

14.  The Tribunal awarded the Applicant $35,612.24 for Shop 29, and $18,780.44 for Shop 30, totalling $54,392.68 [Decision §18-20, 41-43]. The Tribunal also awarded costs against the Applicant as he unreasonably rejected the Settlement Offer, which would have given him a larger amount of money.

B.  THE APPLICANT’S GROUNDS OF APPEAL

15.  The Applicant’s case is difficult to follow. As stated in §§7, 9 and 33-34 of the Decision, despite much time and effort on part of the Tribunal to clarify the Applicant’s version of events, the Applicant was “clearly lost” (§33 of the Decision) and gave confusing evidence.

16.  The Applicant’s grounds of appeal in Form 9 are similarly difficult to make sense of. He did not even state what reliefs he was seeking in the appeal. At the Court’s request, the Applicant has purportedly sorted out his documents in support of each ground. He has lodged no less than 3 sets of submission since this application was first heard in April 2025. Even so, it was not possible to understand his case. Thus an oral hearing was held. That was why the leave application took so long.

17.  Combining his written submissions with the oral submission, the gist of the Applicant’s complaints are that the Tribunal failed to detect the Respondent’s dishonesty and wrongdoing, concealment of her own wrong, ignored the Applicant’s allegations regarding the same, and relied upon inaccurate evidence in reaching the Decision. The alleged dishonesty and wrongdoing can be classified as follows:

(1)  That the Respondent fraudulently overcharged the Applicant for property tax by:

(a)  Failing to give the Applicant his 20% portion of the statutory tax exemption for repairs and outgoings; and

(b)  Allegedly deducting the mother and another sibling’s entitlement, property tax liability from the Applicant’s rental income;

(c)  Fraudulently inducing the IRD to charge the Applicant the flat tax rate of 15% when he had opted for the personal assessment route, which would have resulted in a lower tax rate; and

(d)  Fraudulently inducing the IRD to charge the Applicant a “fictitious 20% property tax rate”;

(2)  That the Respondent withheld from the Applicant his due portion of the 2013/2014 security deposit in respect of shop 30;

(3)  That the Respondent forged tenancy agreements for the 3 Shops with the result that the tenants paid rent to the Respondent exclusively instead of paying the Applicant his due portion;

(4)  That the Respondent evicted the tenant of Shop 42 pre-maturely by one month, in December 2019, and caused the Applicant to lose rental income;

(5)  That the Respondent deducted the estate agent’s commission for Shop 30 and the Shop 30 tenant’s electricity bills from the Applicant’s rental income, despite not receiving the Applicant’s authorization to appoint such an estate agent;

(6)  That the Respondent sought to sell Shop 30 without C’s consent, which also resulted in Shops 29 and 42 having to be vacant. The Applicant requests that this Court stop the sale of Shop 30, continue the renting of the Shops 29 and 42, secure duplicate keys of the Shops so that the Applicant can appoint other professional agents, and waive the Applicant’s liability to pay the fixed costs of the 3 Shops during the vacant period from July 1, 2021 onwards.

(7)  There was error in law regarding the limitation period.

18.  In connection with the above, the Applicant seeks to adduce 4 classes of further evidence on appeal:

C.  APPLICABLE LEGAL PRINCIPLES

19.  Section 28(1) of the Small Claims Tribunal Ordinance (Cap. 338) states as follows:

“Any party who is aggrieved by a decision of the tribunal—

(a) on any ground involving a question of law alone; or

(b) on the ground that the claim was outside the jurisdiction of the tribunal,

may apply to the Court of First Instance for leave to appeal and the Court of First Instance may grant such leave if it thinks fit.”

20.  Generally, challenges on findings of fact are not questions of law. A finding of fact by the Tribunal may only be challenged on appeal if it is “plainly wrong”, in the sense that either there is no evidence to support the finding, or it is contrary to documentary or other incontrovertible evidence that the judge overlooked. It is not enough to show that there is only little or insufficient evidence to support the judge’s finding, or that the finding was contrary to the weight of the evidence: see Mulakh-Raj v Balaji Group Ltd T/A Tulsi Indian Restaurant [2021] HKCFI 2334 at §8, Mimmie Chan J.

21.  Furthermore, the Adjudicator’s assessment of the credibility of witnesses is a finding of fact, and the Court cannot allow such an appeal just because it holds a different view with the Adjudicator. The Court on appeal will not disturb the judge’s findings of primary fact where they are based on the credibility of the witnesses, because the trial judge had the advantage of receiving the evidence first hand: see 鄭樹榮 v 石浩然 [2025] HKCFI 3285 at §11, H Au Yeung J.

22.  As for the principles for adducing new evidence on appeal from the Tribunal, the test from Ladd v Marshall [1954] 1 WLR 148 applies: 健威營造有限公司 對 秦頌德 Chun Chung Tak Hubert [2025] HKCFI 932 at §14, Au-Yeung J:

(1)  Procedurally, an application for leave to adduce new evidence could not be entertained until after leave to appeal has been granted and it is a matter for the Court of Appeal in deciding whether the new evidence should be admitted. However, an applicant in an application for leave to appeal can support such application by reference to new evidence if he can demonstrate that it is reasonably arguable that the Court of Appeal would grant leave by reference to the criteria in Ladd v Marshall. Thus, a judge (including a first instance judge) processing the application for leave would have to examine if the new evidence could arguably satisfy these criteria. If these criteria are not satisfied, such evidence should be disregarded for the purpose of the application for leave to appeal (see Man Lin Heung v 梁根林 & Ors [2019] HKCA 846 at footnote 1);

(2)  As for the test of adducing evidence on appeal, the Applicant must show that: (a) the evidence could not have been obtained with reasonable diligence for use at the trial; (b) the further evidence is such that if given, it would probably have an important influence on the result of the case, though it need not be decisive; and (c) the evidence is such as is presumably to be believed.

D.  APPLICATION TO ADDUCE NEW EVIDENCE

23.  The 4 classes of new evidence are:

(1)  IRD documents allegedly evidencing the Respondent’s dishonest conduct;

(2)  A WhatsApp conversation with the tenant of Shop 42;

(3)  Pictures of the vacant storefronts of the 3 Shops; and

(4)  A copy of the Shop 30 tenant’s electricity bill.

24.  Classes 1 may be of same relevance in showing how the Respondent had wrongly computed the quantum of property tax withheld and not distributed by the Respondent (explained below). The Court will deal with it at an inter parte hearing with the Respondent after the grant of leave.

25.  Classes 2 to 4 are of no relevance to the merits of the claim.

E.  INTENDED GROUNDS OF APPEAL

26.  The grounds are summarized in paragraph 17 above. As a preliminary point, there is nothing placed before this Court to show that the Respondent was fraudulent, lacked good faith, falsified IRD records, misrepresented the facts. A person may have got figures wrong or failed to disclose some documents when doing accounts. That would not necessarily make her fraudulent. It could equally be careless or innocent mistake. The Tribunal has found the Respondent to be honest and truthful. That was a finding of fact on which there was no arguable basis to overturn.

F.  GROUND 1

27.  Having heard the Applicant, it appears that he had wanted to distinguish between property tax and a statutory allowance for repairs and outgoings of a property (“the Statutory Allowance”).

(1)  Property tax was what he had to pay IRD, after personal assessment. It would have taken into account the 20% rents he had received for the 3 Shops.

(2)  The Statutory Allowance was 20% of the rent received on which no tax would be imposed. Its intention was to cover a landlord’s need to pay for repair, maintenance or outgoings of a property.

28.  Property tax was a matter between the Applicant and IRD. If there was an error, he should have raised it with IRD instead of the Tribunal. The Adjudicator committed no error of law. But there appears to be evidence of the Respondent withholding more rent (20%) for “property tax” than what needed to be paid to IRD. Arguably, the Tribunal had failed to consider this in the light of what IRD actually assessed to be the property tax payable; and that the Respondent should have refunded part of such withheld property tax to the Applicant.

29.  Statutory Allowance was, arguably, rent received and should have been distributed by the Respondent to the beneficial owners. (In this case, any expenses for repair, maintenance and outgoings in relation to each of the 3 Shops appeared to have been already deducted from the 80% rent received, as shown in the accounts prepared by the Respondent.) Arguably, the Tribunal has overlooked the true nature of this 20% and thus erred in law in not awarding a share to the Applicant.

30.  That said, the claim in relation to Shop 42 has been settled. It is no longer open to the Applicant to make claims. The evidence he has placed before this Court in this leave application has not shown any grounds for re-opening that settlement.

31.  Accordingly, I give leave to appeal in respect of the claim for property tax and Statutory Allowance as stated in paragraphs 27-29 in relation to Shops 29 and 30 only. The claim is limited to 6 years before the date of the claim, ie. from 17 September 2015 to 16 September 2021 (date of claim form). This covers Ground (1) in paragraph 17 above.

G.  GROUND 2 – SECURITY DEPOSIT

32.  A security deposit should be held by a landlord (presumably the Respondent on behalf of other beneficial owners) during the tenancy. Upon expiry of the tenancy, it has to be returned to the tenant. The Applicant has not shown that this was the subject of his claim before the Tribunal or that he was entitled to payment of a portion of the security deposit. Ground 2 is totally unmeritorious

H.  GROUND 3 – FORGERY OF TENANCY AGREEMENTS

33.  There was no evidence before this Court to support the allegation of forgery. The allegation of forgery is inconsistent with the Tribunal’s finding that the Respondent was honest and reliable. In this application, there is no evidence to support an allegation of forgery.

34.  This ground of appeal is also difficult to follow. Which tenancy agreement was forged? If it was forged, how could the Applicant rely on the existence of that tenancy agreement to claim for rent? Even though the tenants had paid the Respondent “exclusively”, the Respondent had accounted to other beneficial owners. Ground 3 is totally unmeritorious.

I.  GROUND 4 – EARLY EVICTION OF TENANT CAUSING LOSS IN RENTAL INCOME

35.  This is not a claim for rental but damages. The Applicant has not shown how it fell within his claim for rent. There is no evidence that he had raised this claim before the Tribunal either. There is no evidence to show that the Respondent had evicted the tenant. In any case, this claim involved Shop 42, which had been settled. Ground 4 is not arguable.

J.  GROUND 5 - DEDUCTION OF ESTATE AGENT’S COMMISSION DESPITE LACK OF APPLICANT’S AUTHORIZATION TO APPOINT AGENT

36.  This Ground is equally difficult to understand. There is nothing to show that the lack of authorization to appoint had caused loss to the Applicant. To the extent the estate agent’s commission was deducted from the Applicant’s rental income, it has not been shown what the commission was, what the Respondent had deducted or that the Respondent had deducted an excessive amount. Ground 5 is not arguable.

K.  GROUND 6 - COURT TO STOP THE SALE OF SHOP 30, CONTINUE RENTING OF SHOPS 29 AND 42

37.  Ground 6 is effectively an application for an injunction for the Respondent to do or not to do something in respect of the 3 Shops. That is beyond the jurisdiction of the Tribunal and was not a matter before the Tribunal either. This Ground totally lacks merits.

L.  GROUND 7- ERROR IN NOT EXTENDING LIMITATION PERIOD

38.  Taking each Ground individually or collectively, there was nothing that could point to fraud on the part of the Respondent. The finding of the Tribunal, that there was no fraud which allows the Applicant to take advantage of section 26 of the Limitation Ordinance, Cap 347 (§38 of the Decision), cannot be disturbed.

39.  Furthermore, even if there was any overcharging of tax, the Applicant would have become aware of this at the end of each year when the IRD sent him notices demanding the final payment of tax. There is no basis for extending the limitation period in this case.

M.  CONCLUSION

40.  In summary, I give leave to the Applicant to argue the following grounds of appeal:

(1)  That the Tribunal erred in failing to investigate if the Respondent had withheld 20% of the Statutory Allowance relating to the rent for shops 29 and 30 for the 6 years from 17 September 2015 to 16 September 2021 without distributing his share to the Applicant.

(2)  That the Tribunal erred in failing to investigate if the Respondent had withheld 20% of the property tax relating to the rent for shops 29 and 30 for the 6 years from 17 September 2015 to 16 September 2021 without distributing his share to the Applicant.

41.  I wish to remind the Applicant that according to his Amended Claim form, his only claim was for rent up to the statutory ceiling of HK$75,000 and he had waived the amount in excess. He has already received an award of HK$$54,392.68. There are 2 consequences if he is successful on appeal:

(1)  He will at most receive an additional award of HK$20,609.32.

(2)  The Respondent had offered, at the Tribunal, to settle his claim, which was more than what he sought (Decision, §12). The Applicant has rejected that offer. Had he accepted it, this appeal would be rendered otiose. Therefore, even if he is successful on appeal, there is a possibility that the Court may require him to bear the costs of the Respondent.

42.  I direct as follows:

(1)  The Applicant shall serve his grounds of appeal as set out in paragraph 40 above on the Respondent within 14 days from the date of this Decision.

(2)  The appeal shall be set down for hearing for one day and, if possible, before Au-Yeung J.

(3)  The Applicant shall obtain the transcripts of the trial before the Tribunal.

(4)  The Applicant has to prepare a hearing bundle, to include only those documents relevant to the grounds of appeal in paragraph 40 above and the transcripts of the trial. The documents must be properly copied, paginated and put into a lever-arch file(s) with an index. The new IRD documents that he seeks to adduce on appeal must be placed into a separate section. The Applicant should consult the Resource Centre for Unrepresented Litigants at the High Court to see how a hearing bundle should be prepared with the input of the Respondent.

(5)  The Applicant’s written submission for the appeal shall be limited to 15 pages, font size 14, 1.5 line spacing. His submission should set out in a table form the amount of property tax and statutory allowance he seeks to recover for each of Shop 29 and 30 and cross referenced to the document(s) in the appeal bundle.

(6)  The hearing bundle and the Applicant’s written submission must be lodged with the Court and served on the Respondent at least 6 weeks before the date of the appeal.

(7)  The Respondent should lodge and serve her written submission at least 2 weeks before the appeal, limited to 15 pages, font size 14, 1.5 line spacing.

(8)  The Respondent should endeavour to identify any new documents that the Applicant seeks to include in the hearing bundle that were not before the Tribunal.