MAN TIM WAN v. CHUNG TAI HOI

DCCJ 5012 of 2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL JURISDICTION

ACTION NO. 5012 OF 2007

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BETWEEN

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J U D G M E N T

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A. INTRODUCTION

1.  The trial concerns the main dispute on whether there was a verbal agreement allegedly made between the Plaintiff and the Defendant's late husband Mr. Ho Kong (“Mr. Ho”) in 1968 in respect of the land known as lot no. 967 in Demarcation District No. 9 Tai Po New Territories, Hong Kong ("The Property"). Alternatively, the Defendant contended that the Plaintiff made the promise to Mr. Ho that his family could reside there for an indefinite period until they give up their rights (“The 1968 Promise”). The Defendant relied on the hearsay promise and alleged that the whole family suffered from detriment. She relied on the doctrine of proprietary estoppel.

2.  It is common ground that:-

(1)    The Plaintiff is the landlord of the Property and the Defendant's late husband, Mr. Ho Kong (“Mr. Ho”) was the lessee of the Property since 1968. The yearly rent at that time was 3 piculs of rice or its equivalent value at the time.

(2)    The Property is for agricultural use only.

(3)    Shortly after leasing the Property, Mr. Ho obtained the permit from the government to build temporary structures on the Property.  The permitted structures are stated as “dwelling”, “kitchen” and “shade” (“Temporary Structure Permit).

(4)    The conditions of the Temporary Structure Permit contain such usual clauses as “nothing shall be construed as creating the relationship of landlord and tenant (as between the government and the permit holder)”; “no permit … shall constitute a waiver”; “erection of any structure otherwise than in accordance with the terms and conditions in the permit shall be an offence”; “the Authority may in his absolute discretion cancel this permit … .”

(5)    Mr. Ho died in 1989.  As at December 1995, the Defendant occupied the Property as the lessee in place of Mr. Ho Kong.  The yearly rent has been gradually increased throughout the years: $2,640 for 1996, $2,904 for 1997 to 1999, $3,200 for 2000 and thereafter.  The Defendant paid the rent for the said years but she did not pay rent for the year of 2006 on the ground that the Plaintiff did not go to the Property to collect rent.

3.  It is the Plaintiff's case that there was no agreement or the 1968 Promise as alleged. He would not make that promise because it was akin to a gift to Mr. Ho for good, bearing in mind that they had no blood or family relationship at all. He also contended that he has given notice of termination dated 19^th December 2005. He did that through his daughter Ms. Man Sau Chun (“Ms. Man”), by affixing the notice for 3 consecutive days from 19^th to 21^st December 2005 at the gate of the Property. She also caused photographs be taken depicting the newspaper of the day to prove the service of the notice. The expiry date of the lease was 31^st December 2006 but the Defendant refused to give vacant possession. Alternatively, the Plaintiff said that the Defendant was default in paying the rent for the year of 2006, that was due and payable in the end of 2006. He is therefore entitled to possession of the Property.

4.  The Defendant has prepared 2 witness statements in her name, despite attempts, she was unable to confirm or adopt the statements. Counsel for the Defendant, Mr. Chow chose to tender her for cross-examination by the Plaintiff without reliance on her written statements. Be there as it may, the Defence in gist is that one day in early 1968, Mr. Ho told the Defendant that he obtained a lease that entitled them to reside in the Property as long as they wish until they gave up the rights. The eldest son was also present on that occasion, who was then about 11 years old. He is Mr. Ho Yue Tak (“DW1”). The Defendant relied on the evidence of DW1 to support the contention of the 1968 Promise. She also relied on the evidence of Ho Shing Tak (“DW2”) to suggest how the Plaintiff collected rent before the dispute. Both DW1 and DW2 also said that the notice of termination did not come to their notice. The Defendant alleged that it was the Plaintiff who failed to go to the Property or approach the Defendant to collect rent for the year of 2006. The Plaintiff never issued any rental receipt to them.

5.  In rebuttal:

(1)    The Plaintiff reiterated that he did not make the 1968 Promise.  He elaborated that he left Hong Kong for Belgium in 1957 and did not return to Hong Kong until 1970 with copies of his passport in support during which he did not talk to Mr. Ho nor he met Mr. Ho.  He simply entrusted the rental matters, especially the collection of rent to Madam Law Kiu 「羅嬌」also known as auntie Nam「南嫂」until about 1990 when his daughter took over the task.

(2)    The Property was for agricultural land use and he could not have permitted residential occupation over the Property in breach of the condition of the land use.

(3)    He relied on Ms Man's evidence to establish how she served the notice of termination.

(4)    He also relied on Ms Man's evidence that in recent years before the dispute, it was the Defendant or her son who visited Ms. Man's office in Tai Po and paid the rent, instead of Ms. Man went to the Property to collect rent.

B.  Issues

6.  In light of the above and the undisputed relationship of landlord and tenant between the Plaintiff and the Defendant, the fundamental and central issues for determination at trial are:

(1)    whose version is more believable regarding the existence or non-existence of the 1968 Promise.

(2)    whether the Plaintiff has served the notice of termination and whether it should have come to the notice of the Defendant.

(3)    whether the Defendant was in default in paying the rent for the year of 2006.

7.  In respect of the main issues, three subsidiary issues arise which are:

(1)    whether the parties' conduct on payment of rent after 1995 was that as alleged by the Defendant i.e. Ms. Man went to the Property to collect rent or as alleged by the Plaintiff, i.e. the Defendant and/or her eldest son and/or youngest son went to Ms. Man's office to pay rent;

(2)    whether the Defendant was ready and willing to pay the rent for year 2006 at that time.

(3)    whether the Plaintiff has ever issued rental receipt to the Defendant.

C.    THE EVIDENCE

C1.   The Plaintiff's case and evidence in support

8.  The Plaintiff gave evidence and called Ms. Man to give evidence.

9.  His relevant evidence in support of his case can be summarised as follows:

(1)  The Plaintiff was 85 years old at the time of giving evidence.  He left Hong Kong for Belgium in 1957 and left Belgium for Netherlands 4 years later.  His wife joined him in Netherlands in 1963. He did not return to Hong Kong until 1970. He held various plots of land in the New Territories and he entrusted the rental matters especially the collection of rent to his wife until about 1963 when his wife joined him in Netherlands.  The said duty was then entrusted to one Madam Law Kiu 「羅嬌」, his sister-in-law, who was also referred by the parties’ witnesses as auntie Nam「南嫂」.  In about 1990, Ms. Man took over the task of collecting rent.

(2)  The Plaintiff stressed that he was not in Hong Kong during 1957 and 1970.  He referred to extracts of copies of his passport in support.  He did not talk to Mr. Ho during at least, the period from 1957 and 1970, let alone the making the 1968 Promise.  Ho Kong or his family has no blood or family relationship with him and he would not make such promise that tantamount to a gift of the Property to Mr. Ho.  Besides, the land use of the Property was one of agricultural use and he could not permit residential occupation as alleged by the Defendant, in breach of the condition of the land use.

(3)  From about 1968 to 1990, Madam Law Kiu was responsible for collecting the Property’s rent and the Plaintiff produced copies of records of rent. One of the entries shows such descriptions as “Ho Kong, farm rent $100.5, on 6^th February 1978”.  Law Kiu became old, hence since 1990, the Plaintiff’s daughter Ms. Man was responsible to collect rent from the Defendant, made record and issued rental receipts to the Defendant or to her sons.  In about December 1995, while the Plaintiff was in Hong Kong for a short stay, the Plaintiff met the Defendant in Ms. Man’s office premises in Tai Po.  The intention for the meeting was to get all tenants to sign a tenancy agreement to avoid unnecessary argument in future.  But the Defendant refused to sign any agreement.  At that time, the Plaintiff knew that Mr. Ho has passed away.  Nonetheless, the Plaintiff agreed that Defendant should become the tenant of the Property in place of Ho Kong.  The yearly rent was increased to 8 piculs of rice or its equivalent value.  The rent shall be due and payable in the end of the same year but sometimes rent paid before the lunar new year of the next year was acceptable.

(4)  In about December 2005, while the Plaintiff was in Hong Kong for a short stay, he was aware that the Defendant did not pay the rent for the years of 2004 and 2005 in the total amount of $6,400.  He said that he was very much aggrieved by DW1’s attitude while he asked for payment.  DW1 said that he was busy and the Plaintiff must go to the Property to collect rent within half an hour.  Being an old man, he still managed to get there on time and DW1 paid the rent for 2004 and 2005 in the sum of $6,400.  DW1 also told the Plaintiff that they obtained a temporary house permit and the Plaintiff could no longer recover possession.  That led him to make the decision to terminate the lease and issue the notice of termination.

10.  Man Sau Chun’s evidence can be summarised as follows:

(1)    In about 1994, she began to issue rental receipts to the Defendant or her sons upon receiving the rent.  She made use of the carbon paper to make duplicate copies of the receipt.  One copy was kept by her and the other copy would be given to the Defendant or her sons.  She produced copies of those receipts covering the years from 1994 to 2003.

(2)    In about December 1995, while the Plaintiff was in Hong Kong, a meeting was arranged to meet all tenants, including the Defendant, with the view to sign written tenancy agreements but the Defendant refused to sign any written document with the explanation that she would continue to pay rent.  Nevertheless, the Plaintiff agreed that the Defendant was to be the tenant of the Property in place of her deceased husband.  On that occasion, DW2 was also present.

(3)    Therefore, rental receipts from 1995 onwards were issued to Mrs. Ho Kong.  She did not issue rental receipts for the years of 2004 and 2005 because as her father said, the unhappy event took place in December 2005 and her father got the rent in a hasty manner.

(4)    Regarding the notice of termination, after she consulted a staff from the District Lands Office, she obtained a standard form notice of termination.  She filled in the necessary particulars such as the name of addressee, Chung Tai Hoi (Mrs. Ho Kong), the address of the Property, the date of notice 19^th December 2005 and the landlord’s name, contact and address.  She was also advised by the staff that she should affix the notice for 3 consecutive days. On 19^th December 2005, she went to look for the Property and she did affix the said notice at the gate in the vicinity of a house like temporary structure.  She referred to the photographs produced by the Defendant showing where the gate was.  The gate was part of the wire mesh surrounding the temporary house and it was very close to the entrance of the temporary house.  She also went there next day to see and checked if the notice was still there.  It was disappeared and she affixed another copy again and similar thing was done on 21^st December 2005.  She also produced photographs P1a-f to show that how the notice was affixed.  They also depict the newspaper of the day in case there was any argument on not receiving the notice.

(5)    She first assisted her father to lodge the claim in the Lands Tribunal in about February 2007, she was later advised to lodge the claim in Wan Chai instead and as a result the writ of this case was issued in November 2007.

C2.    Defence case and evidence in support

11.  The principal case of the Defence is that one day in 1968, Mr. Ho returned home and told the family, including the Defendant and DW1 that he obtained a lease with the right to reside there as long as they wish until they give up the rights. As said before, the Defendant was unable to confirm or adopt the written statements prepared in her name and her evidence was limited to those in cross-examination. The Defendant can, however, rely on the evidence of DW1 and DW2.

12.  The Defendant’s evidence can be summarised as follows:

(1)    She did not know the contents of her witness statements.  She just put the cross and affixed the chop at the places as was told.

(2)    She knew that she was involved in the litigation and she wanted to get compensation.  She did not know the rational in seeking compensation.  She did not know how her husband leased the Property from the Plaintiff nor she knew the terms save that they needed to pay rent.

13.  DW1 gave evidence in support of the defence case and his relevant evidence can be summarised as follows:

(1)    One day in early 1968, his father returned home and said that he obtained a lease that entitled them to reside there as long as they wished until they gave up their rights.  He was then about 11 years old.  The whole family resided there since then until the siblings moved out one by one.  In recent years, only the Defendant resided there.

(2)    In 1968, his father obtained a permit to build a dwelling on the Property.  The family started to reside there.  His mother delivered DW2 about 2 years later.  They made use of the land for residence, cultivation and shark fin reprocessing with a temporary factory permit.  The re-processing business ceased some time ago.

(3)    Since 1968, they have been paying the crown rent or government rent and they were still paying the government rent as at the date of the statement.  Under cross-examination, he admitted that what they were paying in fact was the fees for the temporary permits.  He explained that he treated the fees for temporary permits as if payment for government rent.

(4)    All along, it was Law Kiu or the Plaintiff or Ms. Man who went to the Property to collect rent and they never issued any rental receipt.

(5)    He treated 1968 Promise as a valid and continuing promise.  The Defendant and the whole family shall all be treated as tenants for life.

(6)    In or about 2002 or 2003, Ms Man told them not to build any house or carry on business on the Property but they treated the request was unreasonable and ignored it.

(7)    For the rent of the year of 2006, the Plaintiff did not send anyone to the Property to collect the rent.  They did not have any means of contact of the Plaintiff or Law Kiu or Ms. Man.  No street number was assigned to the Property and hence no postal address was recorded for the Property.  That was also the reason why they did not receive any notice of termination or solicitors’ letter dated 15^th June 2007.

(8)    Further evidence was given during cross-examination.  In about 1989, he moved out from the Property. The original defence filed in this case was not written by him nor could it be written by his mother because she is illiterate.  He did not know who wrote it.

(9)    The Plaintiff at first lodged the claim in the Lands Tribunal in about February 2007.  DW2 assisted his mother to defend and wrote the defence in the said claim as evidenced in a document dated 8^th February 2007.

(10)   He said that their motive was not to dispossess the Property but as they lived there for a long time and it was justifiable to seek compensation.

(11)   The defence filed in the Lands Tribunal did not mention 1968 Promise.  He explained that he did not tell DW2 about the promise at that time because he did not consider it as important.

14.  DW2 gave evidence in support of the defence case and his relevant evidence can be summarised as follows:

(1)    The whole family did not know the office address of Ms. Man. They have never gone there.  All along was the Plaintiff or his representative who went to the Property to collect rent.

(2)    Further evidence was given during cross-examination.  He has moved out from the Property for 12 years.

(3)    The defence filed in the Lands Tribunal was written by him for his mother.  It did not mention the 1968 Promise.  However, when he was suggested that no one told him about 1968 Promise, he disagreed.

(4)    The original defence filed in this case was prepared by him after discussion with DW1.

(5)    They never received any rental receipt.  They did not request for rental receipt because it was his mother to handle that matter.

(6)    He was not aware that any notice of termination was affixed at the gate as alleged.

C3.   Discussion

C3.1  Plaintiff's evidence

15.  I prefer and accept the Plaintiff’s material evidence on the question of the 1968 Promise in so far as it conflicts with the defence case or the evidence of DW1 and DW2. This is so because his evidence is direct evidence as opposed to hearsay evidence. Further, it is also consistent with the following objective matters:

(1)    He was not in Hong Kong during 1957 and 1970 when the alleged promise was given in 1968.  The property was just one of his various plots of land held in his name.  In those days, he did not quite care about the Property as he earned his living in Belgium and Netherlands.  The rental matters especially the rent collection was entrusted to Madam Law Kiu.

(2)    He did not meet nor did he talk to Mr. Ho at that time.

(3)    Mr. Ho has no blood or any family relationship with him.  He did not and would not make the alleged promise that was akin to a gift to Mr. Ho.

16.  I note that the Plaintiff has given some unclear evidence as to whether the Defendant was present in the meeting in 1995. He explained that he could not remember the events that occurred more than 15 years ago but he was sure that he met the Defendant for three times including the third time in court. The material evidence of the 1995 meeting was to ask the Defendant to sign the tenancy agreement and to confirm that the Defendant shall be the lessee of the Property in place of her deceased husband. This part of the evidence was in fact favourable to the Defendant who then had the locus to stay there, otherwise she was a trespasser. I accept his explanation and do not find these inconsistencies, if any, sufficient to outweigh my above conclusion on the question of credibility.

17.  I accept the Plaintiff’s evidence. Despite his old age, he gave evidence in a straightforward and frank manner, and was hardly challenged or shaken under cross-examination.

C3.2 Man Sau Chun's evidence

18.  I accept Ms. Man’s evidence. She was hardly materially challenged under cross-examination. Although occasionally she was quite long winded and prone to talk about the history of dispute, very much due to the grievances caused by her perception of the conduct of the Defendant’s family and the way of cross-examination, she gave evidence in an open and consistent manner. She took steps to ask how to terminate a lease and did everything possible and reasonable to collect evidence to protect her father, especially on the issues of rental receipts and serving the notice of termination.

19.  Secondly, her evidence is also consistent with the objective matters as follows:-

(1)     She produced photographs with the newspaper of the day to prove that she affixed the notice of termination on the gate on the relevant dates.

(2)     She prepared rental receipts, including those for the years of 2002 and 2003, with some notes reminding the Defendant the Property can only be used for cultivation.  This tallies with part of DW1’s evidence in that he said that in or about 2002 or 2003, Ms Man told them not to build any house or carry on business on the Property but they treated the request was unreasonable and ignored it.

C3.3  Defendant's evidence

20.  I accept her oral testimony. Her evidence under cross-examination reflects that she was acting under the thumb of a person or persons who put or “spoon feed” the version on her. Therefore, she said that she did not know the contents of her witness statements. She just put a cross and affix the chop at the places as was told. I also note that the contents of her written statements are strikingly similar to DW1’s. She just wanted to seek compensation. As to the reasons for seeking compensation, she could not think of any.

C3.4 Ho Yue Tak's evidence

21.  After hearing him in Court, on balance of probabilities, I reject his evidence in so far as it conflicts with that of the Plaintiff and Ms. Man. My reasons are as follows.

22.  First, I find DW1 as an incredible and unreliable witness. He gave evidence in an arrogant manner, if not evasive. He gave long and convoluted answers to simple questions. There is no gainsaying that on some essential matters, his evidence changed and is out of common sense and logic:

(1)     It is lucid that the defence filed in the Lands Tribunal in February 2007 did not mention the alleged promise.  When cross-examined on whether he told DW2 about the 1968 Promise before or at the time DW2 prepared the defence, he said that he did not.  He explained that he did not consider it as an important matter.  This is out of logic and common sense because the alleged promise formed the foundation of the defence but he did not consider it as an important matter.

(2)     He then later changed that he might tell him about the promise but he was not sure whether that was before or after the said defence.  He attempted to explain something that was inexplicable because that was not the truth, as a result, he evaded the follow up questions.

(3)     When cross examined as to how he knew the promise was truthful, he was arrogant and very impolite to the Plaintiff’s counsel: “of course I know and now I tell you this ….”, bearing in mind that he was not present at the time of alleged promise was made.

(4)     When cross-examined on whether they paid the Crown rent or government rent with the intention to bolster up the defence case, he still insisted on the assertion that they did pay the government rent, despite after reading the receipts for payment.  It was only until he was referred to the descriptions written in Chinese that he admitted the receipts related to payment of certain temporary licence fees.  He explained that it was a misunderstanding.  He was unreliable on material aspect.

(5)     He asserted that his father did utter the alleged promise.  Put the defence case to the highest, even if his father did say so, the allegation of which was rejected, I decided not to attach any weight to this piece of hearsay evidence as it suffers from the flaws that it is unbelievable and confronts to objective evidence.  It was a mere statement that does not show the truth of the content.

23.  Secondly, I find that the alleged promise was created after thought. Had there been such a promise, there was no reason why DW1 kept it to himself without telling DW2, bearing in mind the close relationship between DW1 and DW2. Had he told DW2 about the promise, there was no reason why DW2 did not write into the defence filed in the Lands Tribunal.

C3.5 Ho Shing Tak's evidence

24.  I also reject his evidence in so far as it conflicts with that of the Plaintiff and Ms. Man. My reasons are as follows.

25.  First, I find him as an incredible and unreliable witness. The evidence suggests that both DW1 and DW2 took an active role in assisting their mother to defend the case both in the Lands Tribunal and in this case. The relationship between DW1 and DW2 is close. As said before, had there been such a promise, there was no reason why DW1 did not tell DW2. Had he told DW2 about the promise, there was no reason why DW2 did not write into the defence filed in the Lands Tribunal. His evidence was inconsistent with the above objective matters. It is out of logic and common sense.

D. FINDINGS

26.  Given my above conclusions on the witnesses’ relevant evidence, I make the following findings on the main issues:

(1)     The Plaintiff did not make the 1968 Promise.

(2)     The Plaintiff has served the notice of termination on the Defendant through Ms. Man for 3 consecutive days from 19^th December to 21^st December 2005 at the conspicuous place of the Property.

(3)     According to section 62 of the Conveyancing and Property Ordinance Cap. 219, a notice to quit could be served by affixing the same on the land in question.  The Defendant only disputed whether the notice was affixed and did not challenge the length or the form the notice, I therefore rule that the service was a valid service.

(4)     I also found that the said notice should have come to the notice of the Defendant or the Property’s occupiers.  See Hill and Redman’s Law of Landlord and Tenant (Issue 71), para A [4545] and Lord Bewborough v Jones [1975] Ch 90.

(5)     Except for the rent for the years of 2004 and 2005 that the Plaintiff said that the event in December 2005 caused him feeling dismay, the course of dealings between the parties since 1995 show that the Defendant and/or her sons went to Ms. Man’s office to pay rent.  It is not the case as suggested by the defence that the Plaintiff or his representative went to the Property to collect rent.

(6)     The Defendant’s conduct showed that she was not willing to pay the rent for the year of 2006.  She was in default in paying the rent for the year of 2006.

27.  In so far as necessary, I also make the following findings on the subsidiary issues:-

(1)     As found before, the course of dealings between the parties since 1995 show that the Defendant and/or her sons went to Ms. Man’s office to pay rent.

(2)     The Defendant’s conduct showed that she was not ready or willing to pay the rent for the year of 2006.  She was in default in paying the rent for the year of 2006.

(3)     The Plaintiff has issued rental receipts to the Defendant or her sons through Ms. Man covering at least the period from 1994 to 2003.

E. Conclusion

28.  For the above reasons, I accept the Plaintiff’s case and reject the Defence case. The Defendant’s reliance on the doctrine of proprietary estoppel failed because the allegation of representation or promise, the essential element of proprietary estoppel, was rejected. (See Halsbury’s Laws of Hong Kong, Volmune 11(2) (2008 Reissue) para. [170.121-170.122].

29.  I allow the Plaintiff’s claim. I hereby give the following orders:-

(1)     The Defendant do give possession to the Plaintiff of the land known as lot no. 967 in Demarcation District No. 9 Tai Po New Territories, Hong Kong;

(2)     The Defendant do pay to the Plaintiff the arrears of the rent for the year of 2006 in the sum of HK$3,200;

(3)     The Defendant do pay mesne profits to the Plaintiff at the rate of $3,200 per year from 1^st January 2007 until possession was given;

(4)     The Defendant do pay intereston the arrears of rent in the sum of $3,200 at half judgment rate from date of writ to date of judgment, thereafter at full judgment rate until full payment.

(5)     Costs order nisi in that the Defendant do pay the costs of the action be to the Plaintiff with certificate for counsel to be taxed if not agreed.  Unless any of the parties applies by summons to vary it, the costs order nisi shall be made absolute 14 days from today.

(6)     Defendant’s own costs be taxed in accordance with Legal Aid Regulations.