XCHRX TRANS ERA LTD. v. TSEUNG SUI HIN AND ANOTHER

HCA 7058/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 7058 OF 2000

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REASONS FOR DECISION

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1. This is an appeal against the decision of Master Ho on 11 October 2000 when he gave judgment for the Plaintiff under Order 14 for a claim for arrears of rent and rates and possession of the premises leased by them to the two Defendants who trade or traded as Amanda Boutique.

2. The lease in question is dated 12 May 1999. The Plaintiff company became the assignee of the landlord by deed dated 15 June 1999. There is interest claimed in respect of late payment of rent for the months of October and November 1999. The unpaid rent claimed is for the months of May, June and July 2000. The rates claimed are for the period October 1999 to June 2000. The balance of the sum claimed is made up of other interest due on the outstanding amounts.

3. When the learned Master made the order the only evidence of any relevance from the Defendants was an affirmation dated 19 August 2000 by the second named Defendant. It was extremely short. In paragraph 6 it deposed that she and her co-Defendant decided to transfer all "rights, benefits, duties and responsibilities" to a person named Yip Wai. It goes on to allege that oral consent to this "transfer" was given by Lee Foo Wah (the Plaintiff's agent) and Yau Jason Soenarko (the Plaintiff's director). No document is relied upon. Yip Wai is alleged to have paid the rent since March 2000.

4. The Plaintiff - in the form of the said Mr Lee and Mr Yau - deny any such oral consent and any knowledge of any such decision. It is scarcely surprising that the Plaintiff obtained judgment.

5. On behalf of the Defendants in this appeal Miss Y. Y. Hui firstly seeks leave to appeal out of time. The time for appealing expired on October 25. The Notice of Appeal is dated the 31 October 2000. No satisfactory explanation has been advanced for the delay, short though it is. Miss Hui has sought to rely upon an affirmation by Yip Wai which was filed four days ago. She needs leave to file and rely on it. There is no affirmation from the Defendants' solicitors explaining why there was no compliance with the time limit. No letter or faxed communication to or from either of the Defendants has been exhibited or produced. Instead I have been given a belated oral statement to the effect that the Defendants are abroad, one in Canada and one in Taiwan, and both had given oral instructions to appeal on 16 and 17 October respectively. That does not explain why the Notice of Appeal was not filed in time. All that Yip Wai, who is not a party to the action, says is that the Defendants were and are out of Hong Kong, that it was impracticable to secure either of them to provide affidavit evidence for their appeal (which is not for him to say and is in any event incorrect), and that he too was out of Hong Kong and could not give instructions until 26 October. As the solicitors concerned in this appeal are acting for the Defendants, Yip Wai is in no position to give instructions in any event.

6. It is clear to me that there is no merit whatever in the application for leave to appeal out of time. Nonetheless I proceeded to hear the next aspect which is the application for leave to file the affirmation of Yip Wai and rely upon its contents for the purposes of the appeal. There is no explanation for its lateness. It is dated 13 November 2000. Yip Wai has been available since 26 October. I am told that he is the person effectively giving instructions in relation to this appeal.

7. It now appears Yip Wai is the son of the first named Defendant. He purports to depose on her behalf concerning a number of matters one of which is a suggestion that the Defendants were unaware of the implications of parts of the tenancy agreement. The second named Defendant makes no such suggestion. There are also a number of illogical contentions which do not merit consideration.

8. His main contention is that Mr Yau agreed to change the name of the tenancy so as to enable him (Yip Wai) to take over the liabilities and benefits under it. He goes on to say he paid the monthly rent. Although there appears to be an inconsistency between paragraph 15 of his affirmation and the entries on the bank statements exhibited by him, explained by Miss Hui in her submissions, what is clear is that he does not claim to have paid rent for May, June or July. Nor does he give any explanation for the non-payment. In fact nothing is said in his affirmation about the unpaid rent and rates, an astonishing omission. Miss Hui asked me to infer from some reference to a promise by Mr Yau to replace the Defendants' name plate (broken, it is alleged, not by the Plaintiff but by a neighbour of the Defendants) that rent was withheld because Mr Yau had not kept his promise.

9. Finally he relies upon a piece of paper bearing his and the second named Defendants name and/or signature as evidence of a transfer to him by the second named Defendants of her shares in the business and of the tenancy. In fact it does not even begin to resemble any legal transaction which has anything to do with this case. There is at least one other material matter which Mr Yip Wai fails to confront. On 26 February 2000 the first named Defendant (his mother) who according to Yip Wai in paragraph 14 of his affirmation had decided in June 1999 to go back to Canada for good and wanted him to take over the business and tenancy, applied to register the business of "Amanda" at the premises in question in her own name and that of a Miss Yu Wai Fun. The application is signed by both of them (p. 55-56). Similarly he has not commented on the letter signed by his mother on behalf of Amanda Boutique, dated February 2000 to Mr Lee Fu Wah, the Plaintiff's agent, which apologises for rent being in arrears and explains that a Miss Yu Wai Fun (the other signatory to the business application referred to above) will deal with such matters. There is of course no affirmation from either Defendant, or Miss Yu Wai Fun which deals with this. Miss Hui sought to give some explanation for the application of the 26 February 2000 but I confess I had difficulty in understanding it. These facts and the obvious irresistible conclusions to be drawn from the documents underline the worthlessness of Yip Wai's affirmation. That affirmation which I allow in evidence for the purpose of this appeal goes only to support the Plaintiff's case that there is no credible defence, that it is a sham, and I have concluded, there are clear indications of dishonest statements on the part of Yip Wai.

10. As to the merits of the appeal itself which I have gone on to consider, there are none. The Plaintiff's status as landlord is agreed. The terms of the tenancy are clear. The fact that rent and rates are unpaid is accepted. No explanation is advanced for their non-payment. There is not a shred of a tenable Defence apparent. The detail, to the extent that it is necessary to review, I have already covered when dealing with Mr Yip Wai's affirmation.

11. Finally I need to deal with Mr Yip's application for the Company Winful Taiping Limited to be joined as a Defendant. Since there is no merit in the appeal there is no merit in his application. If he wishes to pursue some nebulous claim he will have to do so in separate proceedings. Neither he nor the Company meets the provisions of section 2F or H of the High Court Ordinance. His affirmation is more notable for its omissions as to relevant matters, than for its content. His application is therefore dismissed with costs.

12. The appeal having failed the Defendants must pay the Plaintiffs' costs. I have assessed these costs after hearing argument from Miss Hui and Mr Joeson Wong, in the gross sum of $43,000.00 which includes counsel's fees of $17,000.00. I make a forthwith order.

13. One matter remains for me to consider and it causes me concern. I suspect that this appeal has been pursued at the behest of Mr Yip Wai. Madam Wong Fung Lam is the only Defendant to have deposed to anything. A document signed by her purportedly transferring her interest in Amanda Boutique has been produced not in her affirmation but in that of Yip Wai. She may genuinely believe that Mr Yip Wai agreed to take over her liabilities. The letter and Business Registration application signed by the first Defendant is some support for this. She may be entitled to an indemnity from him. This appeal has resulted in a further financial burden for her. The same solicitors have been acting for her as acted for Mr Yip. There is clearly a conflict of interest. Nothing has been produced to me which shows that the Defendants solicitors have ever considered this or explained the position to her or obtained her written instructions to proceed with the appeal with full knowledge that she has or may have a claim against Mr Yip Wai.