CHANG WUAN CHEUNG v. CHAN TIM KEE(a firm)

IN THE COURT OF APPEAL

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JUDGMENT

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McMullin, V.-P.:

1. The appellant is a firm which for some thirty years has been in occupation of premises on Cheung Chau Island. Those premises have been rather variously described in certain of the documents associated with these proceedings. In the writ which commenced the proceedings with which we are concerned, it was described as the ground floor of 122 Praya Central but in the Notice of Termination served upon the plaintiff, they were referred to as Stall 122, Ferry Street. This matter was debated in the course of the hearing of the appeal this morning but we are satisfied that the premises thus variously described are in fact one set of premises, stall No.122. That does not seem to have been disputed at any stage between the parties.

2. These premises are owned by the Cheung Chau Chinese Residents Association, who were not parties to these proceedings.

3. On the 16th of March, a writ of summons had been issued by the plaintiff, claiming possession of Stall 122 on the basis of non-payment of rent. On the 6th of May a defence was put into that action which was then compromised by an agreement between the parties. On the 31st May, 1983 a Notice of Termination under part V of the Ordinance - these being business premises - was served upon the plaintiff.

4. Before Judge Baily on the 19th of July 1983 certain agreed facts were put before the Court, amongst them an admission that the plaintiff has never been in actual occupation of the premises since the commencement of the head tenancy held from the Cheung Chau Chinese Residents Association. The final paragraph in the agreed facts is in the following terms:

"The plaintiff admits that the head landlord has served a valid Notice of Termination dated 31st May, 1983 on him and is due to expire on the 30th November, 1983."

5. The Notice of Termination served upon the plaintiff expired on the 30th November, 1983 and it is the appellant's contention that thereafter the plaintiff ceased to have any title upon which he could rely.

6. The original order for possession and mesne profits, made by consent on the 19th July, 1983 included an order for a stay of execution of the order for possession for one year. That stay was therefore to end on the 19th July, 1984.

7. On the 22nd October, 1984 the plaintiffs applied ex parts for a combined writ of fi fa and possession. The application was supported by a brief affidavit by the respondent, which did not disclose anything in relation to the Notice of Termination which had expired eleven months earlier. The order was granted by Judge Wong in the District Court on the 22nd of October.

8. There followed somewhat confusing proceedings. The appellant sought first of all a stay of proceedings on the writs of possession and fi fa. The application for stay came one before Judge Baily on the 9th of November and that was refused. Then on the 27th November, there was an Application for Review of the previous order and an application to set aside the writ.

9. We are satisfied that the Application for Review was inappropriate and what was effectively before Judge Baily was an application to set aside the writ of possession. Before us the appeal concerns that matter only and we restrict our attention to the prayer in the notice of appeal which asks that the order granting the writ of fi fa and possession be set aside.

10. In his ruling on the 29th of November, Judge Baily himself would seem to have been under some misapprehension as the nature of the review which was asked for. He said: "I see no grounds to review my original order of the 19th July." That was, of course, the consent order, and it was not the review of that order which was being sought. However, that is not a matter which need now concern us. He went on to say:

"I do not see any ground for my setting aside the writ of possession granted by Judge Wong. I accept that I have authority to consider and, if necessary, set aside the Writ of Possession even though the ex-party application was made before another Judge."

11. Before us, Mr. Mackay has taken as his central point that at the time when the combined writ was granted, there was no title in the plaintiff and that therefore the consent judgment upon which he was purporting to rely was dead and the order which purported to enforce it without effect.

12. Mr. Ma for the respondent has argued, that since the original Judgment was by consent and since the application before Judge Wong was procedurally correct in the manner in which it was presented, the Order then obtained was a valid order. He said that at that date, the consent judgment not having been set aside, it was open to him to maintain that, notwithstanding the Notice of Termination, the plaintiffs had sufficient title to insist upon the execution of the order contained in the judgment by consent. He contended that paragraph 9 of the agreed facts, relating to matters relating to the association, which was not a party to the action, could not have the effect of an order of the court and could not affect his rights under the consent order.

13. We are satisfied that there is no substance in that argument. The concession in the agreed facts, that the head landlord had served a valid Notice of Termination, can only be construed as acknowledging that the Notice would have the effect of terminating his title to Stall 122 upon the terminal date of the Notice.

14. It is to be noted that, when the matter was argued before Judge Baily on the 27th of November, there were two affidavits before him. One of these is by CHU Pak-sang, the Chairman of the Cheung Chau Chinese Residents Association. In paragraph 6 of that affidavit, Mr. Chu refers to the agreement reached between the plaintiff and the defendant, as embodied in the agreed facts, and he says:

"It was at that time the understanding of the plaintiff, the Defendant and myself (on behalf of the Association) that the judgment was to be stayed for a long time so as to enable the period of notice of termination given by the Association to the Plaintiff to run out and that upon termination of the head tenancy, the Defendant need not go out of possession and would become a direct tenant of the Association. It was on this basis that the plaintiff in the agreed' facts admitted that the Association had served a valid Notice of Termination on him which was due to expire on the 30th November, 1983. The parties came to this agreement because the plaintiff had never been in possession or occupation of the suit premises and it would be pointless and indeed impractical for the defendant to move out of the suit premises. on the 30th November, 1983 in order that the plaintiff could hand over the possession to the Association and go back into possession on the 1st December, 1983 to be a direct tenant."

15. In fact, since the end of November 1983, the Association has accepted the defendant as its direct tenant and he has paid to them.

16. The defendant, CHAN Sing-tim, put in an affidavit in similar terms, which was before Judge Baily when he heard the matter on the 27th. There were no answering affidavits on the other side.

17. The position then would appear to be that, by virtue of what had been agreed at the time of the consent judgment, the plaintiffs were prepared to accept that the Notice of Termination would in effect end their title by the 30th November. When, therefore, they came to ask for the writ for possession many months later, they were bound by that admission but made no disclosure of that fact to the Court when Judge Wong dealt with the matter.

18. Notwithstanding what was said by Judge Baily on the 27th of November, we take the view that the writ of possession was ineffective and should not have been granted and very likely would not have been granted if the true position had been made apparent when the matter was before Judge Wong.

19. It is not in dispute that one District Judge has power to set aside an order by another judge made ex parte, which was the nature of the order made by Judge Wong, if the order is shown to have been in error.

20. We are satisfied that the refusal to set aside the order for possession and fi fa was, for the reasons I have given, incorrect and that the appeal must be allowed.