SHAM OI YUN AND OTHERS v. MA CHING WAH

DCCJ 2047/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2047 OF 2014

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DECISION

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1. This is the 1^st named plaintiff, Shum Oi Yun (“P1”)’s application for summary judgment against the defendant (“D”) for:-

(1)   Recovery of possession of the land situated at the Remaining Portion of Lot No 369 in Demarcation District No 3, Lamma Island, Hong Kong (“the Land”);

(2)   Mesne profit for his wrongful occupation of the Land.

2. On 15 August 2014, D filed his defence.  On 11 September 2014, P1 issued the present summons.

3. On 22 October 2014, Master D Ho granted leave to the 2^nd named plaintiff (“P2”) to the 9^th named plaintiff (“P9”) to join in this action, and to amend the Amended Statement of Claim accordingly.

4. Before the hearing started, D’s counsel made an oral application in court to apply for adjournment so that D could adduce further affirmation evidence of Leung Ka Li Gordon in opposition to the application for summary judgment.  No summons and affirmation had been taken out and filed to support D’s application.

5. According to paragraph 3 of Registrar Lui’s order dated 25 September, 2014, it is clearly stated that:

“ No further affirmation evidence shall be filed and served without leave of this Court and any such application, if any, shall be made not less than 14 days before the substantive hearing supported by reasons on affirmation”

6. D’s application was refused accordingly.

Background of P1’s claim

7. P1 is the daughter of Shum Man Kwong, deceased (“the Deceased”).  P2 to P6 are P1’s siblings, and P7 to P9 her nephews.

8. By an Assent dated 29 July 2013, P1 to P9 (“Ps”) have become and still are the registered co-owners of the Land holding 1/10 share thereof as tenants-in-common.

9. It is Ps’ primary case that P1 is the proper plaintiff to pursue the claims against D in this action.  P2 to P9 joined in just as a matter of caution.  P2 to P9, being the co-plaintiffs, all support P1’s claim in this action.

10. A written tenancy agreement dated 1 May 2008 entered into between the Deceased as landlord and D as tenant (“the written Tenancy Agreement”), the Deceased leased the Land to D for a term of 6 years at an annual rent of HK$3,000 (“the Lease”).

11. The Lease expired on 30 April 2014, and that there was no renewal of lease between the Deceased and D at any time before or after the expiry.

12. The Deceased passed away on 26 July 2009 and P1 has become the sole executrix of the Deceased’s estate (“the Estate”).

13. Before the Lease’s expiry, in their letter dated 11 December 2013 and 18 March 2014, P1’s solicitors already notified D to quit the Land by 30 April 2014.  None of Ps was notified that Shum Kwok Leung (“SKL”) had entered a lease with D in July 2014.

14. Up to date, D refused to deliver up possession of the Land to P1.

Defendant’s case

15. Most of the facts in Ps case are not in dispute.

16. D does not dispute Ps are part of the group of people that co-own the Land.

17. There is no dispute that the written Tenancy Agreement was expired 30 April 2014.

18. D has all along recognized that Ps, and their predecessor in title of the Deceased, are part of the group of people that co-own the Land.

19. The issue raised in the defence concerns the capacity of a particular party to act for and on behalf of the co-owners of the Land.  It is D’s case that D had always dealt with the proper person authorized to act for an on behalf of the co-owners of the Land:-

(1)   Before the Deceased passed away, upon the understanding that the Deceased represented the co-owners of the Land, D dealt with the Deceased.

(2)   After the Deceased died, upon the understanding that SKL now represented the co-owners of the Land, D dealt with SKL.

20. In late June 2014, D entered into an agreement with SKL, whereby SKL, on behalf of the co-owners of the Land, agreed to let and D agreed to take a lease of the Land for a further term of 3 years from 1 July 2014 to 30 June 2017 at an annual rent of HK$5,000.  It was also agreed that the D would pay the rent for the entire term of the tenancy in advance, i.e. HK$5,000 per year X 3 years = HK$15,000 (the “2014-2017 Tenancy Agreement”):-

(a)   On or about 1 July 2014, SKL and D signed a document to give effect to the 2014-2017 Tenancy Agreement.  On or about 9 July 2014, D’s solicitors had arranged for a Stamp Certificate in respect of the 2014-2017 Tenancy Agreement to be issued under the Stamp Duty Ordinance.

(b)   Pursuant to the 2014-2017 Tenancy Agreement, D paid SKL HK$15,000, being the rent in respect of the Land for the entire term of the tenancy from 1 July 2014 to 30 June 2017.

Applicable legal principle

21. The principles governing an application for summary judgment are well settled as set out in sections 14/4/8 – 14/4/12 of the Hong Kong Civil Procedure 2015.

22. To resist an application for summary judgment, D must show that there are triable issues.

23. The court should only give summary judgment if it is satisfied that the defences raised by the defendant are wholly unarguable or not worthy of belief or bound to fail.

24. A concise statement of the standard approach in an application for summary judgment is to be found in the dicta of Ma J, as he then was, in Schindler Lifts (Hong Kong) Ltd v Ocean Joy Investments Ltd [2003] 1 HKC 438.  The court has to determine two questions: firstly, whether what the defendant says is believable as opposed to whether its version of events is to be believed; and secondly, if it is, whether what the defendant says amounts to an arguable defence in law.  In determining the first question, the court should not embark on a mini trial of the action on affidavit evidence.  The burden of proof is not a heavy one.  It is not the function of the court at this stage to assess if a defence will succeed at trial.  Insofar as the second question is concerned, summary judgment will not be granted if there are arguable defences or serious disputes of law.

25. In Chin Lan Hong & Others v. Cheung Poh Choo & Others (CACV 98/2004) at paragraph 32, the Court of Appeal held:

“The position in Hong Kong is similar to that in Australia and New Zealand and in the United Kingdom prior to the 1925 legislation. A tenant-in-common is entitled to deal, in whatever way he desires, with his own undivided share: he may lease it or dispose of his right to possession to a stranger as he likes without the concurrence of the other tenants in common. See Incorporated Owners of Chungking Mansions v Shamdasani Murli Pessumal & Others [1991] 2 HKC 342 at p.352G–H”

Discussion

26. The Ps’ claim is based on tenancy by estoppel.  Ps’ counsel has citied the following cases to support his argument.  Industrial Properties Ltd v AFI [1997] 1 413 580 (CA); Typhoon & Research Ltd v Seapower Resources International Ltd & Anor [2001] 3 HKLRD 773.

27. From D’s affirmation, I find that the tenancy by estoppel has no application on the present facts.

28. The main issue in this case to be determined at trial is whether SKL has capacity  to enter the 2014-2017 Tenancy Agreement  or he is acting  for and on behalf of other co-owners of the Land.

29. Other than a copy of 2014-2017 Tenancy Agreement, D does not produce any proof that SKL is a beneficial owner of the Land or he was authorized by co-owners of the Land to enter the lease with D.

30. In 2014-2017 Tenancy Agreement, SKL claimed himself as the landlord and entered the lease in his personal capacity without stating that he was acting on behalf of other co-owners.

31. From the land search record, SKL is not one of the registered owner or a beneficial co-owner in the Land.

32. It is not disputed by Ps that one of the co-owners of the land called Ling Shum (“LS”) who passed away and the Letters of Administration of his estate was granted to Leung Ka Li Gordon (who was the lawful attorney of one Shum Kam Fai) as administrator.  According to P1’s evidence, SKL was only one of the 3 grandchildren of LS, and the son of Shum Kam Fai.  However, by looking at the said Letters of Administration, one cannot tell who is the beneficiary of the estate of LS, deceased or to what extent Leung Ka Li Gordon has administered such estate either.  There is no evidence before the court, apart from D’s  assertion, that  SKL is one of the legal and/or beneficial co-owners of the Land.  Even so, D could have told but did not tell the court how he had come to such understanding.

33. P1 made it clear in her 2^nd affirmation that neither she nor any one of P2 to P9 (all of them being legal co-owners holding 1/10 share in the Land) have ever authorized SKL to enter into any tenancy agreement with D on their behalf.

34. According to the legal principles laid down in Chin Lan Hong & Others v Cheung Poh Choo & Others (CACV 98/2004), if SKL, even without the consent of Ps, but has the capacity to grant a tenancy agreement to D, Ps has the right to sue SKL based on his rights over the land but not under the tenancy agreement since Ps are not party to it and D is not a trespasser given the existence of the tenancy agreement. Under such circumstances, Ps’s claim against D for vacant possession must fail.

35. There is no evidence before the court why D up to the hearing of this application could not provide further evidence in respect of SKL’s capacity in entering the lease.

36. Ps’ intention to evict D from the Land can be seen obviously from P1’s solicitor letters to D on 11 December 2013 and 18 March 2014 respectively.  There is no reason for D to believe that the 2014-2017 Tenancy Agreement was entered by SKL with the authorization from all co-owners of the Land. 

37. There is no prima facie evidence that SKL has any legal title in the Land.

38. This summons was taken out on 11 September 2014 and the hearing date was on 5 November 2014.  There was about 3 months time for D to adduce further evidence as to whether SKL is a legal and/or beneficial co-owner of the Land or acting under authorization from other co-owners.

39. I remind myself that in determining whether the words of D are believable, I should not embark on a mini trial of the action on affidavit evidence. In fact, this case is very straight forward, once there is evidence to support that SKL has capacity to grant tenancy to D, it will be the end of this matter.

40. Apart from the 2014-2017 Tenancy Agreement and the payments for rent in sum of HK$15,000, there is also evidence that SKL is a grandson of LS who was a co-owner of the Land to support D’s case.  I cannot at this stage simply base on SKL entering the 2014-2017 Tenancy Agreement in his own name to preclude the possibility that he was acting for and on behalf of other co-owners.  Hence, I cannot say at this stage what D says is a bare assertion only and not worthy of belief. There are triable issues in this case.

41. However, I would like to say D, in fact, has plenty of time to produce poof as to SKL’s capacity, but to unknown reasons to this court, D failed to do so. It is very unreasonable. I think a costs in the cause order will be more appropriate under such circumstances.

Order

42. The plaintiff’s application is dismissed.

43. Costs of the application for adjournment, with counsel certificate, be to the plaintiff, to be taxed if not agreed. Costs of this application be in the cause.  The costs order nisi will become absolute in the absence of application to vary in 14 days.