E. WAH REALTY LIMITED v. SURE WIN INVESTMENT COMPANY LIMITED AND ANOTHER

IN THE COURT OF APPEAL

1985, No. 151
(Civil)

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JUDGMENT

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Silke, J.A.:

1. These are consolidated appeals.

2. The first is an appeal by Berthier Godown Limited - "Berthier" - from the order of His Honour Judge O'Dea sitting as a Deputy High Court Judge allowing Berthier's appeal from an order of the Master. That order was made in proceedings for relief against forfeiture brought under s.58(4) of the Conveyancing and Property Ordinance. The judge granted the vesting order sought on condition that they paid the sum of $578,079.41, together with rental for the suit premises from 1st July 1985 to the date of the Master's order on 11th October 1985, within 7 days. In respect of the rent, the 7 days ran from the date of a receipt by Berthier of a notice specifying the amount.

3. Berthier seek to argue a fresh point, and alternatively seek an order vesting the premises in themselves without conditions or, and as further alternative, seek a variation of the conditions imposed by the judge.

4. The second appeal by Berthier is against the decision of Mortimer, J. striking out, as an abuse of the process, proceedings brought by Berthier in High Court Action No. 6160 of 1985 - called in the course of the hearing "Appeal No. 151".

5. E. Wah Realty Limited and Kowloon Realty Limited were the owners of two ground floor premises at Ocean View Building, Quarry Bay. For practical purposes they are the landlords - "the landlords".

6. Sure Win Investment Company Limited was the tenant - "the tenant" - of those premises. Berthier had become the sub-tenant, holding from the tenant under an agreement.

7. The tenant failed to pay rent. The landlords issued their writ claiming possession on 8th August 1984. On 10th December 1984, under a consent order, judgment was entered for the landlords for possession and arrears of rent. There was a stay on terms in respect of payment of arrears of rent and of mesne profits by instalments. The tenant defaulted. On 7th January 1985, there was a default judgment, also by consent, for possession.

8. On 12th April 1985, the landlords applied for leave to issue a writ of possession. Berthier, on being given notice of that application, applied on 10th April 1985 to be joined as defendant in the action as between the landlords and the tenant. This summons was dismissed on 16th April.

9. On 17th April Berthier took out another inter parte summons under the provisions of section 58(4) of the Conveyancing and Property Ordinance Cap. 219 seeking an order vesting the suit premises in Berthier. The section appears in part VI of Cap. 219 under the heading "RELIEF AGAINST FORFEITURE". Subsection (4) reads:

"Where a lessor is proceeding by action or otherwise to enforce a right of re-entry or forfeiture under any covenant, proviso, or stipulation in a lease, or for non-payment of rent, the court may, on application by any person claiming as under-lessee any estate or interest in the property comprised in the lease or any part thereof, either in the lessor's action (if any) or in any action brought by such person for that purpose, make an order vesting, for the whole term of the lease or any less term, the property comprised in the lease or any part thereof in any person entitled as under-lessee to any estate or interest in such property upon such conditions as to execution of any deed or other document, payment of rent, costs, expenses, damages, compensation, giving security, or other-wise, as the court in the circumstances of each case may think fit, but in no case shall any such under-lessee be entitled to require a lease to be granted to him for any longer term than he had under his original sub-lease."

10. By issuing this summons, Berthier were clearly asserting themselves to be under-lessee of the suit premises and therefore admitting that they held no tenancy from the landlords.

11. The powers of the Court in granting relief against forfeiture are discretionary and wide ranging. On 19th September, Berthier apparently indicating that the usual conditions as to payment of arrears of rent and so on were not acceptable, the Master dismissed the application. On appeal, Judge O'Dea made a vesting order, subject to conditions which he was fully entitled to impose.

12. Berthier did not comply with those terms.

The New Point

13. While the Notice of Appeal seeks to contest the conditions, these grounds of appeal were not pursued before us. The only point sought to be argued was a new one, for which leave was necessary. The point was this: Berthier sought to argue that they were entitled to occupy the suit premises on the basis that their sub-tenancy with the defendant was and still is subsisting and binding on the plaintiff landlord notwithstanding the termination of the defendants' (tenant) tenancy with the plaintiff landlord - "the surrender point". Since, it was said, possession had been surrendered by the tenant under a consent judgment this left existing sub-tenants unaffected.

14. In The owners of the ship "Tasmania" v. Smith and others,(1) Lord Herschell said at page 225, in respect of the taking of a new point on appeal:

"    My Lord, I think that a point such as this, not taken at the trial, and presented for the first time in the Court of Appeal, ought to be most jealously scrutinised. The conduct of a cause at the trial is governed by, and the questions asked of the witnesses are directed to, the points then suggested. And it is obvious that no care is exercised in the elucidation of facts not material to them.

It appears to me that under these circumstances a Court of Appeal ought only to decide in favour of an appellant on a ground there put forward for the first time, if it be satisfied beyond doubt, first, that it has before it all the facts bearing upon the new contention, as completely as would have been the case if the controversy had arisen at the trial; and next, that no satisfactory explanation could have been offered by those whose conduct is impugned if an opportunity for explanation had been afforded them when in the witness box."

15. The point now sought to be argued could not have been advanced in an application for relief against forfeiture, since it was directly contrary to it nor was it a point raised by Berthier when they had applied to be joined as defendant in the action.

16. Mr. Ho, in a valiant attempt to obtain the necessary leave, said that this point did not occur to Berthier's legal advisers until a very late stage in these proceedings. This is not a satisfactory reason for departing from the principle. that an appellant is not entitled to raise, upon his appeal, a new case inconsistent with that raised at the court of trial. (Reddish In re Walton).(2)

17. We therefore refused leave to argue the new point.

Abuse of process

18. This left the appeal against the striking out by Mortimer, J.

19. Berthier, during the currency of their application under section 58, and of the proceedings ancillary to it, issued a writ on 8th November 1985 and served a Statement of Claim seeking a declaration that they had become tenants of the tenant thus attempting to litigate, in separate proceedings, the surrender point.

20. At the hearing of 0.14 proceedings by Berthier, and of a concurrent summons to strike out by the landlords, Mortimer, J. knew that there was a judgment for possession of the premises in favour of the landlord; that there existed a vesting order in favour of Berthier; and that an appeal seeking leave to argue the surrender point had been filed. The position was approaching absurdity. The judge appreciated that the landlords themselves were in an impossible position, they could get neither rent nor possession. In fact, no rent has been paid to them since about May 1985.

21. He felt that the action before him amounted to an attempt to appeal a decision of the Court by bringing a separate action and further, if the appeal before us were to continue, that it would be an attempt to try issues which lay within the province of the Court. He fully recognised that a party must not be shut out from the Court but felt that there was no question of preventing Berthier from raising this point in litigation - he was clearly referring to the matter which lay before us. He concluded that the proceedings before him were an abuse of process and further that Berthier were estopped from raising in those proceedings the surrender point.

22. Miss Eu for the respondents has referred us to Hoystead & others v. Commissioner of Taxation(3) and that passage of the opinion of the Board delivered by Lord Shaw at page 165:

"In the opinion of their Lordships it is settled, first, that the admission of a fact fundamental to the decision arrived at cannot be withdrawn and a fresh litigation started, with a view of obtaining another judgment upon different assumption of fact; secondly, the same principle applies not only to an erroneous admission of a fundamental fact, but to an erroneous assumption as to the legal quality of that fact. Parties are not permitted to begin fresh litigations because of new views they may entertain of the law of the case, or new versions which they present as to what should be a proper apprehension by the Court of the legal result either of the construction of the documents or the weight of certain circumstances. If this were permitted litigation would have no end, except when legal ingenuity is exhausted. It is a principle of law that this cannot be permitted, and there is abundant authority reiterating that principle."

23. We think that passage to have direct application to the proceedings before Mortimer, J. and before us. The Conclusion to which he came was the only and proper one.

24. The result is the first appeal, there being no argument on the terms of the vesting order, is dismissed. Both appeals are dismissed, the respondents to have costs below on a common fund basis and costs of both appeals on a party and party basis.

(1) [1890] Vo1. 15 Appeal Cases 223

(2) [1877] 5 Ch. 882