GLENEALY MANSION LIMITED v. NORMAN PERSAUD

1985, No. A5758

IN THE HIGH COURT OF JUSTICE

HONG KONG

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JUDGMENT

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1. This action has had a somewhat checkered history. It is a matter of record and I will not rehearse it.

2. The Plaintiff's claim is for possession of premises on the grounds that the Defendant is a trespasser. The Defendant (who acts in person, although he is the member of the Bar) denies that he is a trespasser claiming that he holds the premises under an oral agreement of 17th March 1983 or alternatively on the basis that knowing he was contending that he was holding as a tenant, the Plaintiff accepted rent from him after 23rd May 1983. He also relies on laches, quasi-estoppel, waiver and acquiescence and further he counterclaims for certain losses. I need say no more about the counterclaim at this juncture. If the counterclaim arises at all or could arise (which is doubtful) it can only arise if he establishes a right to possession and I indicated at the outset of this case that I would try the issue as to whether he is entitled to possession first.

3. The Plaintiff owns a flat on the 5th floor, the top floor, at No. 28 Arbuthnot Road. There are other flats below and car-parking spaces. The building became occupied some time after 21st May 1973, and much later the 5th floor flat was let by the Plaintiff to Madam CHAN Chung Hon, Annette, by an agreement dated 29th November 1978. The lease was for three years commencing on 15th December 1978, the rent $2,000 per month exclusive with usual covenants not to under-let or part-with possession. On the expiration of that term, the tenancy became a protected one and there was an application by the Plaintiff as landlord for an increase in rent. That was granted from 15th December 1981 and the rent became $2,600 per month. The Plaintiff's only business is to own and manage this block at 28 Arbuthnot Road, and since about mid 1978 Catherine Wong (who gave evidence) has been managing the building by taking rent. At all material times she has been doing that. She was employed by the Fook Chi Trading Company whose address is 45 Des Voeux Road, Central and the Plaintiff has some common directors and is associated with Fook Chi Trading Company only in that respect. The building was never let in normal course of business. The building was kept for the use of employees visiting the territory, (employees of Fook Chi Trading Company) and an occasional employee such as a lady called Jennie Shun who occupies one of the flats. She has not given evidence. From time to time a flat was let to someone personally approved by the directors or one of the directors' wives. It seems reasonably certain that the premises were never all let at the same time.

4. After Madam Chan became tenant of the 5th floor, the rent was paid on her behalf from the outset by cheques drawn by other people. It appears rent was always paid on her behalf by cheques drawn by someone else. It appears that one Louis Lee paid up to August 1979 and after that until April 1983 one Lee Tse Kong, David drew all the cheques. After signing the tenancy agreement with Annette Chan, Catherine Wong did not see her again, but rent plus ancillary payments for electricity, etc. was always paid. The general system was that if rent was received on its due date, a receipt would be issued signed by Catherine Wong on behalf of the landlord after the cheque was cleared. If rent was not received on time, or ancillary payment was required, a memorandum for rent would be sent. All memoranda for rent sent in respect of these premises were at all times in the name of Annette Chan and receipts were issued at all times in her name as well.

5. I am satisfied that the fact that some memoranda to Annette Chan were addressed to a Kowloon address at Caravan Road is not indicative that Catherine Wang and through her, the Plaintiff was aware that Annette Chan was no longer residing at these premises or had in any other way given up her tenancy. I am satisfied that Annette Chan gave that address to Catherine Wong as her office address.

6. It is now clear that by March 1983 Annette Chan had ceased to occupy these premises.

7. The Defendant arrived in Hong Kong in about January 1983 and he wanted a flat to live in. It is the Defendant's case that he came into contact with one David Fan from the Gainfast Property Agency Ltd. Neither David Fan nor anyone from Gainfast gave evidence. I am satisfied that the Defendant was shown these premises. He was on that occasion accompanied by Stephen Liu, a solicitor's clerk who has given evidence. At that time, the Lees and a child and an amah were living there. On the whole of the evidence and on balance of probabilities, I am satisfied that there was a notice on the gate to these premises with the words "to let", in Chinese. It had on it 2 telephone numbers - 1 is the no. of Fook Chi and the other of Jenny Shun's flat. It was not the notice which was produced by the Defendant - exhibit D1, but it was one in similar terms. It is not clear, however, whether that notice related to this flat. As I have said, I am equally satisfied, in spite of that notice, that the building was not on the market. There were other tenants but they were accepted and approved by either a director of the Plaintiff, Tan Geok Tee or his wife. It is clear from the evidence that Catherine Wong had no authority to let herself, this is also clear from Mrs. Lee who gave evidence for the Defendant. It is equally clear that Jenny Shun was not employed by the Plaintiff and had no authority to let either. I will refer to the position of Jenny Shun again later in my judgment.

8. On the Defendant's own account, his dealings with Gainfast and the Lees were wholly extraordinary, because of the nature of negotiations and the agreement eventually made. It appears from the Defendant's evidence that rent was agreed at $2,600.00 per month, exactly the statutory rent that Annette Chan should have paid as tenant of these premises. There was an agreement for the purchase of all the furnitures and fittings by the Defendant. There was also an agreement that a deposit was to be paid to the outgoing tenant, the basis of which I do not understand. The Defendant was told that all bills for rates etc. should remain in the landlord's name for convenience, so that if there was a change of tenant, there would be no problem. That I understand to be a possible convenience. There was an agreement that he should pay rent direct to the landlord's registered office, it was suggested to him that the landlord preferred cashier orders, (according to him) but cheques were acceptable; the Defendant also produced a receipt for an agency fee. Finally, when dealing with David Fan, according to the Defendant, it was suggested that the landlord's name should appear on all receipts. There was nothing put in writing is the agreement with Gainfast. Nothing was said of any other terms, length of tenancy, type, or anything of that sort.

9. On 20/4/83, the Defendant moved his furniture into the premises. On that occasion Stephen Liu was with him and had a conversation with Jenny Shun. She was contacted in order to open a padlock at the gate - (as shown in photograph 23) - because a bed could not be easily taken through. In the course of that conversation, Stephen Liu speaking in Cantonese to her, told her that the Defendant was moving into the top flat.

10. Pausing here for a moment, there is no reason to think that the notification was in any way of concern to Jenny. There was no evidence of any kind that she was acting in relation to the letting of the premises as agent of the Plaintiff, and there is evidence (which I accept) that she was not employed by the Plaintiff. As I have said, I will return to her position in the course of my judgment.

11. On the whole of the evidence I have heard and in particular that of Catherine Wong, I entirely reject the Defendant's case insofar as it is based upon the Lees having any authority to let the premises, insofar as it is based upon Gainfast having authority, and insofar as it is based on Jenny Shin having any authority to let; or indeed insofar as it was founded on any implied knowledge of the landlord that lie moved into the premises on 20/4/83 contending that he was the tenant. There was no evidence from Gainfast, although it (apparently) is still in existence. There is no evidence from Mr. Lee.

12. This finding is a very significant one, it means that the Defendant had originally moved in without any proper authority from the landlord. I may say that I am prepared to accept the evidence the Defendant gave to the effect that he was shown the premises by David Fan, that at that time the Lees were in occupation, and an agreement was made for him to go in. The significance is that he went in at that time without any proper authority of the landlord, and certainly at that time without their knowledge.

13. Of course the Defendant's case does not end there, he contends he still has a tenancy. He contended first that the Plaintiff knew through Catherine Wong that he occupied as a tenant (not sub-tenant), and secondly that rent was accepted from him as a tenant. From these facts it is said that a tenancy can be implied; from the unequivocal recognition of his tenancy, see Lever Finance Ltd. v Trustee of property of Needleman & anor [1956] 2 ALL ER 378.

14. It is clear that no such tenancy could be implied until firstly the Plaintiff knew that Annette Chan had in some way terminated her tenancy or had left the premises, and secondly that the Plaintiff knew that the Defendant was occupying the premises contending that he was a tenant, and on that basis was accepting rent from him, see Tickner v Bazzacott [1965] 1 Ch. 426 at p.435B.

15. I leave aside for the moment the Defendant's submission relating to waiver, acquiescence, laches and quasi-estoppel.

16. The Defendant's case is that on each occasion when he paid rent on 23/5/83, 27/6/83, 28/7/83 and 14/9/83, that on all occasions until 12/11/83 he paid rent personally to Catherine Wong and that he had told her on 23/5/83 that he was in occupation of the premises. It is upon this issue - the knowledge of the Plaintiff that he was occupying the premises and contending that he was a tenant when the Plaintiff accepted rent from him personally - that the case turns.

17. The payment of rent on 23/5/83 is important, this was the first time rent was paid after the Defendant occupied the premises. It might have been thought in light of his agreement with Gainfast, that he would visit his new landlord to whom he would pay rent to introduce himself and make arrangements for paying rent. That on all the evidence did not take place. The Defendant paid on that occasion by a cashier order on the basis that he had been told by Gainfast that the Plaintiff so preferred. In relation to the events on 23/5/83, there is a serious issue between the Defendant and Catherine Wong.

18. Catherine Wong said she had no reason whatsoever to suspect Annette Chan was not still in occupation and still was the tenant. There was no reason for her to suspect having regard to the history, that payment of rent by someone else on behalf of Annette Chan meant that Annette Chan had given up the Tenancy or moved out. She further gave evidence that she recalled the receipt of the cashier order, that it was in a plain envelope without any memorandum, and she only knew to whom to credit the payment because of the exact sum of $2,639.10 being rent due from the premises. Catherine Wong was cross-examined at very considerable length, and on this matter I find Catherine Wong's evidence utterly compelling. It is totally inconsistent with the Defendant's account. I believe there may have been good reason at the time why Defendant paid by a cashier order. It was so that his name would not appear at that time on any document which was going to the landlord. The Defendant was cross-examined on this, and I found his answers unimpressive. I note his unwillingness to offer the possibility that his bank statements be produced to support his evidence for the reason why he gave a cashier order at that time.

19. The Defendant in his evidence said that on arrival at the Plaintiff's office, he asked for Catherine Wong, she was called by the receptionist and she accepted the envelope from him, the evidence which the Defendant gave first of all in chief was that he told Catherine Wong that he had moved in since 20/4/83.

20. After final speeches, when I was about to give judgment, the Defendant asked for leave to further amend his pleading; I granted him leave, and in the course of the evidence he was giving on another matter, he applied to give further evidence of this vital part of his case. I gave him leave to do so and when he gave evidence, he said that by error he had omitted to tell the court that he also informed Catherine Wong that he was the new tenant of the premises. In case it be thought that I am rejecting his evidence about what happened on 23/5/83 on the basis that he did not give complete evidence when he first gave evidence, I should say this; that I am satisfied that it was an oversight on his part when he first gave evidence, that he always wanted to tell the court that he told Catherine Wong that he was the new tenant because that was set out in his original Defence which has been amended several times since.

21. However, having heard Catherine Wong and having heard the Defendant, I am driven to reject the Defendant's evidence on this matter. I am satisfied that Catherine Wong did not meet the Defendant on 23/5/83, I am quite satisfied that the cashier order came into Catherine Wong's hand in a plain envelope after that was left at the Plaintiff's office.

22. On 2 later visits to the landlord - on these two later occasions on which the Defendant contended he met Catherine Wong, he is supported by Miss Chui, his girlfriend who gave evidence to that effect. I am again quite satisfied that the Defendant did not meet Catherine Wong on any occasion that he contended for when he was paying rent and indeed did not meet her until 15/9/83, the date Catherine Wong said they first met. In any event, unless it was spelt out very clearly by the Defendant to Catherine Wong that he was paying rent to her as tenant and not simply paying rent on behalf of Annette Chan, the fact that he was paying rent was not of concern to Catherine Wong, having regard to the history. This is a digression from my judgment and perhaps an unnecessary one in light of my findings.

23. I rely in deciding this issue very much on the contemporaneous documents. It is not disputed Catherine Wong signed the rent receipt on 23/5/83 and on every occasion thereafter. All these receipts were addressed to Annette Chan, the original tenant. These documents provide support for the Plaintiff's case and Catherine Wong's evidence. The fact that every single receipt was issued to Annette Chan and every single memorandum for rent was also addressed to Annette Chan is inconsistent with the Plaintiff knowing the Defendant was in occupation and was accepting from him rent as tenant. Further, on Defendant's own account, he never raised this question with the landlord as to why, if he was tenant and paying rent as such, he was not getting first rent demands addressed to him, and secondly why no receipts for rent he paid. I find his explanation for the documents being in Annette Chan's name quite unconvincing.

24. As I have said, on the whole of the evidence, I am satisfied that Catherine Wong did not meet the Defendant until 15/9/83. It happened that the receptionist was not there on that day and Catherine Wong can recall it. The Defendant came to the counter, and made complaints about no water supply and no light on the staircase. He said on that occasion that he was the tenant occupying the top floor. That was something astonishing to Catherine Wong. Her action was consistent with her evidence. She went to consult her boss, then she returned to the Defendant and told him he was an illegal tenant and must leave. The Defendant returned on 12/11/83 and made the same complaints, but that was not the first occasion he was told he was an illegal tenant.

25. I am satisfied that the Plaintiff accepted no rent after Catherine Wong, and through her, the Plaintiff had knowledge that the Defendant was saying he was a tenant. There is significant support for Catherine Wong's evidence to be found in the documents, or rather from the absence of them. After September 1983 no demand memoranda were sent and that seems to me to be consistent, and significantly so, with Catherine Wong's evidence that the dispute had arisen and that by then she knew for the first time that the Defendant was saying he was a tenant, and not consistent with what the Defendant said happened on 12/11/83. If the Plaintiff was accepting rent from the Defendant, knowing that he was saying that he was the tenant, and accepting that from him, there is no satifactory explanation why the Plaintiff suddenly changed its attitude. The Defendant suggested that it was because of complaints he made. That seems to me in all the circumstances to be an insignificant matter and the Defendant cannot point to any covenant to repair to lay any duty on the landlord.

26. If the Plaintiff had no knowledge of the contention of the Defendant about his tenancy from Catherine Wong. Did the Plaintiff have knowledge from any other source? What is suggested is that it had knowledge from Jenny Shun but there is no evidence that the Plaintiff had direct knowledge from Jenny Shun, indeed the evidence is to the contrary.

27. Is therefore any knowledge Jenny Shun may have had about the Defendant occupying as a tenant to be imputed to the Plaintiff? I accept Stephen Liu's evidence that he had told Jenny Shun that the Defendant was moving in to the top floor because he had rented it. I accept there was a telephone number on a notice that was at the gate of the premises which was Jenny's number. I accept from time to time messages were given to Jenny Shun to pass on to Catherine Wong because they worked in the same office (which I understand to be a fairly large one) and from time to time Jenny Shun would obtain keys and asked for repairs (e.g. repair to locks of the door). But when all that evidence is set against the fact that Jenny Shun was not working for the Plaintiff, I find that Jenny Shun was not in any way an agent of the Plaintiff for any purpose other than simply, perhaps from time to time, carry some messages or keys. There is nothing in all this evidence from which it could be imputed, on balance of probabilities, that the Plaintiff had knowledge of the Defendant's occupying as tenant.

28. Then it is suggested Tan Geok Tee - a director of Plaintiff had knowledge that the Defendant was occupying as tenant because Tan Geok Tee was also occupying one of the flats in the premises and had seen the Defendant from time to time on the staircase and would therefore know that he was occupying as a tenant. The evidence that Tan was occupying a flat at the premises is tenuous indeed. The Defendant certainly believed so, but the basis of his belief was firstly that Gainfast, for what that is worth, had told him so; that he often saw a gentleman riding in a chauffeur-driven Mercedes which was parked at the car park and that that gentleman was always well dressed. Set against that is Mrs. Lee's evidence that having met Mrs. Tan when she was vetted as a tenant she never saw Mrs. Tan again, although Mrs. Lee had been living there for some years. All the proper inferences are, from the evidence I have heard that Tan was not occupying a flat there and Defendant was mistaken. On balance on the evidence I have heard, I am inclined to find that Tan is not occupying as a tenant. Even if he were, there could be no proper inference I could draw that because he saw someone going to the top flat (even if he believed the Defendant was living there) there was still nothing to make him think that the Defendant was a tenant.

29. In relation to the whole of the evidence, I wish to say a little more. I have considered all submissions made on behalf of the Plaintiff and the Defendant. I have considered such matters as the complaints made about placing rubbish; about the words ''without prejudice" found on some of the receipts; about the door being repaired; about the bills submitted to Annette Chan and about the utilities bills appearing in Annette Chan's name. I have considered the correspondence in this case, and I have considered the letterhead of Kwong Ming Property Management Co. Ltd. which gave an address at the ground floor of the building; and all other relevant matters (if they are) in relation to complaints made by the Defendant about the absence of flushing crater and light in the staircase. Having considered all these matters, I am satisfied Catherine Wong was accurate in all material parts of her evidence. I am satisfied she was an honest witness and accurate, in particular about all the main issues of the case in relation to receipt of rent, how she received it, and her knowledge about the Defendant. She was cross-examined by the Defendant for several days, most of that cross-examination, if relevant at all, can only be relevant on credibility. That exceedingly lengthy cross-examination showed, for example, that Catherine Wong may have been mistaken about the regularity of the words "without prejudice" being placed on the documents but taken as a whole, that lengthy cross-examination of her was ineffective and she emerged from that cross-examination as a witness upon whom I felt I could certainly rely, and so I do.

30. Turning to other matters now, I am sure although there was some delay by the Plaintiff in proceeding with the case, there is not the slightless doubt that the Plaintiff was refusing rent and was asking for possession. The Defendant was never in the slightness doubt as to that. The Defendant then relied on his paying rates - an argument which is clearly untenable. That apart, the Defendant's case on waiver, acquiescence, laches and quasi estoppel has nothing in it.

31. These are the findings of fact and I find the Plaintiff is entitled to possession and mesne profits.

32. I will turn to these matters in a minute, there is just one other matter I wish to mention. In the course of submissions the Defendant was inclined to say that 2 witnesses who might have helped his case are not here. They are Jenny Shun and Tan Geok Tee and that he had issued subpoena against each of them to attend. At the end of his submission, I gave the Defendant opportunity to make any application in relation to these witnesses, to enforce the subponeas, if they are enforceable, and for any adjournment; but he made no such application. He was satisfied that the case was to be tried on the evidence before the court. I may perhaps add that having heard something about the subpoena against Tan it is most unlikely that it is effective.

33. Turning now to the question of mesne profits. The rent for the premises which would have been received from Annette Chan until l4/12/83 would be $2,600.00. As I understand it from 15/12/83 it would have been open, under normal circumstances, for the Plaintiff to apply for an increase in rent. In my judgment such increase would have been granted. I am in some difficulties in assessing the increase and so I have tried to be a bit on the low side. I will make that $500 per month. Similarly there would have been a further increase on 15/12/85. In my judgment there would have been a further increase of $500 per month. In the circumstances, mesnesprofits which the Plaintiff can claim will be a total of $96,600. (There followed submissions about the exact calculation of mesne profits on the above basis. )