CHAN YUNG SING & OTHERS v. CHOI CHUNG CHING

HCA 4830/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 4830 OF 2002

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REASONS FOR DECISION

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1. The Plaintiffs are 5 individuals who are trustees of Shuen Wan Heung (船灣鄉). Shuen Wan Heung is a collection of 12 indigenous villages in Tai Po, New Territories.

2. The Plaintiffs are the registered owners of the property known as Lot No. 964 in Demarcation District No. 26. The property is located in Sam Mun Tsai, Tai Po. By a tenancy agreement dated 10 August 2002 ("the Tenancy Agreement"), the building erected on the said property ("the Premises") was let to the Defendant for a term of 2 years commencing from 1 August 2002 at the monthly rent of $15,000.00.

3. In this case, the Plaintiffs alleged that the Defendant had committed various breaches of the Tenancy Agreement, thereby entitling them to forfeit the Defendant's tenancy. The Plaintiffs now apply for summary judgment claiming, inter alia, possession of the Premises, various injunctive relief and damages. In the alternative, the Plaintiffs seek an order for interim payment.

4. The acts which allegedly constituted breaches of the Tenancy Agreement are rather unusual. I will deal with them in turn below.

Activities at Premises in Contravention of the Law

5. The first complaint concerns the activities or business conducted by the Defendant at the Premises. Relevant to this complaint are the following provisions in the Tenancy Agreement:

"2. The Tenant ... agrees with the Landlord in the manner following that is to say: -

(h) To use the said premises for such lawful purposes as permitted by the Government.

(m) ... shall do nothing in contravention of the provisions of the Government lease under which the Landlord holds the said premises and shall indemnify the Landlord against any breach of the terms of this Clause.

(n) To obey and comply with and to indemnify the Landlord against the breach of all ordinances, regulations, bye-laws, rules and requirements of any Governmental or other competent authority relating to the use and the conduct and carrying on of the Tenant's business on the said premises or any other act, deed, matter or thing done, permitted, suffered or omitted therein or thereon by the Tenant or any employee, agent or licensee of the Tenant."

6. Clause 2(a) of the Government Lease prohibits the use of the Premises "as a 'Chai Tong' or for any other purpose of a similar nature" except with the written permission of the District Officer.

7. The Plaintiffs alleged that since about 8 September 2002, the Defendant had been conducting activities or business of an "undertaker of burials" or a funeral parlour without the relevant licences from the authorities. Such conduct contravened Section 92AB of the Public Health and Municipal Services Ordinance, Cap. 132, and Section 4(1) of the Funeral Parlours Regulation. Alternatively, the Plaintiffs alleged that the Premises had been used as a Chai Tong or for purposes of a similar nature in contravention of the provisions in the Government Lease. In turn, the contravention of the statutory provisions and the Government Lease constituted a breach of the terms of the Tenancy Agreement.

8. It is the Plaintiffs' case that by a letter issued through their solicitors dated 12 September 2002, they had given warning to the Defendant to desist from using the Premises for purposes of funerals, or as a Chai Tong or some such related purposes. The warning was ignored by the Defendant.

9. On 16 November 2002, the Plaintiffs through their solicitors issued another letter pointing out that the Defendant's conduct continued to be in contravention of the statutory provisions, the Government Lease and the terms of the Tenancy Agreement. By the same letter, notice was given to the Defendant to remedy the breaches within 3 days ("the Notice"). The Defendant was further demanded to remove from the Premises all materials used in connection with or for the promotion of activities relating to funerals, or operation as a Chai Tong or some such related purposes.

10. In view of the Defendant's failure to comply with the Notice, a letter dated 21 December 2002 was sent by the Plaintiffs' solicitors to the Defendant to forfeit his lease. In addition to the ground of unlawful business or activities conducted at the Premises, other grounds for forfeiture were also relied on which will be mentioned later in this Judgment.

11. A series of photographs taken on various dates have been produced to show the activities, operation or business conducted at the Premises. There is no dispute as to the date when these photographs were taken.

12. Photographs on 8 September 2002

(1) A large placard bearing the words "功德殯儀念佛 免費為村民服務" was prominently displayed on the side of the main entrance of the Premises.

(2) The entrance doors to the building were kept open. Several objects were placed at the entrance hall which were clearly visible from the outside: an altar in the middle of the hall covered with a piece of red cloth; an incense pot wrapped in gold-coloured foil placed at the centre of the altar with joss sticks in the pot; a large placard bearing the words "功德殯儀離別處" prominently displayed in front of the altar; a piece of black cloth with white symbols which resembles a "fu" (符咒) (symbols ascribed with spiritual powers) mounted on a pole behind the altar.

(3) In front of the entrance was a terrace where another incense pot wrapped in gold-coloured foil was placed. Joss sticks were seen in the pot.

(4) A brick furnace, usually used for burning paper offerings, was constructed in the open space in front of the terrace.

13. In addition to the objects depicted in the photographs, Mr Lo who filed evidence on behalf of the Plaintiffs, also mentioned that the incense and joss sticks on the altar were burning as offerings: paragraph 21 of Mr Lo's 1st Affirmation - a fact which is not disputed by the Defendant. He also mentioned that chanting of prayers could be heard emanating loudly from the Premises.

14. Photographs on 30 September 2002

(1) The altar covered with the red cloth remained in the entrance hall. Joss sticks were still seen planted in the incense pot on the altar. Both the placard in front of the altar and the "fu" behind the altar had been removed. Above the altar was a new placard bearing the words "行善積德".

(2) It appears from one of the photographs depicting the entrance gate that the placard "功德殯儀念佛 免費為村民服務" was removed.

15. Photographs on 15 November 2002

(1) The photographs depicted a group of villagers from nearby villages protesting against the unlawful operation of funeral services at the Premises. It can be seen from the photographs that a new placard with the words "南無啊彌陀佛" was hung on the side of the entrance where "功德殯儀念佛 免費為村民服務" used to be.

(2) On top of the entrance was another sign prominently displaying the words "功德" which, if read together with the small words underneath, appears to be the Chinese name of a company called Raymond Investment Company (which I will further mention below).

(3) The gold-coloured pot for incense and joss sticks remained on the terrace in front of the main entrance to the building.

(4) The top of the furnace constructed in the open space was still visible in some of the photographs.

16. Photographs on 2 December 2002

(1) The placard with the words "南無啊彌陀佛" was still hanging outside the entrance. The sign "功德" was still displayed on top of the entrance.

(2) Two large paper dolls, resembling those used as offerings to the dead, were placed inside the Premises but very close to the entrance, clearly intended to be visible from the outside.

(3) Two large banners, bearing the words "天下太平" and "國泰民安" were hanging from the roof.

(4) The "fu" (the black cloth with symbols) can be seen flying on top of the roof.

17. Photographs on 20 December 2002

(1) One of the photographs taken on that day showed 2 coffins being placed on the terrace in front of the building. The gold coloured incense pot still remained on the terrace.

(2) Three other photographs taken on the same day showed that the 2 coffins were lifted onto the roof and one was placed on each side. The "fu" was still flying on top of the roof.

(3) In addition, a white flag was flying from a pole on one side of the building and another "fu" written in red on a piece of white cloth was hanging down from the other side of the building.

18. Photographs on 2 January 2003

(1) The 2 coffins on the roof were removed. However, the black "fu" was still flying on the roof, but apparently at half-mast.

(2) The "fu" written in red and the white flag were still hanging at each side of the building.

(3) The altar was still placed inside the Premises with joss sticks and the incense pot on it. A large paper doll was placed next to the altar.

19. The 2 placards depicted in the photographs of 8 September 2002 both contained the words "殯儀" - funerals. When the other words in the placards - "功德", "念佛", "離別" - were viewed together with the whole setting of the Premises - the presence of the altar, the furnace, the "fu", and the burning of incense and joss sticks - it was clear that the activities undertaken by the Defendant, or at least held out to be undertaken at the Premises were in the nature of funerals, or rites and ceremonies connected with burials of the dead.

20. Not only was the Defendant undertaking the aforementioned activities at the Premises, as evident from the placard "功德殯儀念佛 免費為村民服務", such activities were offered as a service to the villagers.

21. Although by 15 November 2002, despite the removal of the words "殯儀", the objects commonly associated with funerals and burials remained on the Premises: see the letter from the Food and Environmental Hygiene Department which will be referred to later in this judgment.

22. It is significant to note that by 15 November, the words "功德" were not merely suggestive of the nature of the activities, they were in fact assumed - no doubt due to the previous placards "功德殯儀念佛" and "功德殯儀離別處" - to be the name of the business carried on at the Premises. This was clearly evidenced by the description of the Premises as "功德殯儀館" in one of the placards held up by the protesters.

23. It is, in my view, no coincidence that the words "功德" were given such prominence in the sign above the main entrance to the Premises. I am in no doubt that the contrast in size of the words "功德" and "投資公司" was designed precisely to give the impression that the activities conducted at the Premises were to continue as before - in other words, the Premises would continue to be used for purposes connected with funerals and related rites pertaining to burials.

24. Further still, the presence of the objects in December and early January, namely, the 2 coffins, the paper dolls, as well as the prominent display of the "fu" on the roof and the side of the building was, in my view, the clearest confirmation of the continuation of the abovementioned activities undertaken by the Defendant, or held out by him to be undertaken at the Premises.

25. The Defendant's evidence was that in August 2002, he was appointed an agent of one Shenzhen Xili Baoenfudi Cemetery Service Co. Ltd ("the Cemetery Company") to promote the sale of permanent burial plots in a graveyard in Shenzhen. He rented the Premises because he considered that villagers in Tai Po would have a strong demand for permanent burial plots at reasonable prices. He therefore obtained business registration for his agency business under the name of Raymond Investment Co., which in Chinese was 功德投資公司. The nature of the business was described as "investment".

26. The Defendant's appointment was, however, not contemporaneously documented. On his own evidence, the confirmatory letter of appointment was only procured from the Cemetery Company after he had received legal advice. The letter of appointment together with the covering letter were both dated 15 January 2003, which was after the commencement of this action.

27. The Defendant's evidence was that facilities for a funeral or burial service was "totally unnecessary" for his agency business. Given that to be the case, I find it both surprising and significant that the Defendant had made no attempt to explain the offer of services of a nature which bore strong connection with funerals and burials of the dead: see paragraphs 19 and 20 above. Also the Defendant is completely silent as to how these services were relevant to his business.

28. With the exception of the coffins which the Defendant said had been "mistakenly placed on top of the roof", the Defendant also made no attempt whatsoever to explain the presence of the ominous objects on the Premises. They certainly went far beyond anything one would expect to find at an agency office, even for an agency promoting the sale of burial plots. It is also significant to note that the eerie and disturbing setting of the Premises was completely at odds with the ambience of peace and tranquility of the graveyard pictured in the brochure of the Cemetery Company.

29. As for the coffins on the other hand, whilst the Defendant sought to explain that they were supposed to be placed inside the house pending disposal, he did not give any reason why they should be on the Premises in the first place at all. There was also no explanation of how they were supposed to be disposed of; why they had become "mistakenly" lifted onto the roof and then strategically positioned on each side of it.

30. Viewed against the photographs and the matters mentioned in paragraphs 19 to 24 above, I am in no doubt that the Defendant's allegation that he was carrying on an agency business at the Premises to promote the sale of burial plots in Shenzhen was incredible and unbelievable.

31. Mr Mak for the Plaintiffs further submitted that the letter of appointment was itself suspicious. Although it purported to set out the terms of the Defendant's agency, the document omitted the all-important term regarding how his commission was to be determined. Whilst I would agree that the content of the letter of appointment as well as the circumstances in which the 2 documents came into being do give rise to suspicion, I do not find it necessary to determine the question of authenticity of these 2 documents for the purpose of this judgment. Irrespective of whether the Defendant was appointed an agent by the Cemetery Company, for the reasons given above I have no hesitation rejecting the Defendant's allegation that the business he operated at the Premises was that of the agency.

32. I now turn to the question whether the evidence adduced by the Plaintiffs was sufficient to substantiate their complaint that the Defendant's conduct contravened the relevant legislation and/or the provisions in the Government Lease which in turn rendered the Defendant in breach of the Tenancy Agreement.

33. The Public Health and Municipal Services Ordinance, Cap. 132 ("the Ordinance"), Section 92AB provides:

"No person shall conduct, or open or keep open, any place for the purpose of any activity specified in Schedule 11A [i.e. undertakers of burials] except under and in accordance with a licence issued by the Authority."

34. Although there is no definition of "undertakers of burials" in the Ordinance, the definition of the term in the Undertakers of Burials Regulation is, in my view, applicable. In the Regulation, an "undertaker of burials" is defined to mean:

"a person whose trade or business it is to undertake all or any duties connected with the burial of human cadavers and includes a funeral director."

35. First, it should be noted that in defining "undertaker of burials" to include a person whose business is to undertake "any duties connected with the burial of human cadavers", the language of the definition makes it clear that it is not a requirement for the activity in question to involve the actual burial or handling of human cadavers. Apart from interpretation of the language, I also draw support for this view from the inclusion in the definition of a funeral director, whose role does not necessarily require him to be involved in actual burials.

36. Secondly, my view is that the word "business" in the definition of "undertaker of burials" has a more extensive meaning than "trade": see Harris v. Amery (1865) LR 1 CP 148, Willis J at 154; Rolls v. Miller 53 L J Ch. 99, Pearson J at 101. Although it is normally the case that business is conducted with a view to profit, it is not a necessary requirement. Since the purpose of the legislation is to regulate the activity of an undertaker, I do not see why it should make any difference whether the activity is conducted for gain or for free. Accordingly, in the present case the fact (as indicated in the placard) that the services were offered free to the villagers does not make it any less a business of the Defendant.

37. Thirdly, as the definition of an "undertaker of burials" refers to a "business ...... to undertake etc.", my view is that the requirement of Section 92AB is satisfied where a person holds himself out to be undertaking or carrying on the business of an undertaker (as defined). In my opinion a person inviting business by holding himself out as ready to accept business is indeed conducting the business even before he receives his first customer.

38. Thus, for the period from at least 8 September to 21 December (the latter date being the forfeiture of the tenancy) the evidence discussed in paragraphs 19 to 24 above clearly showed that the Defendant was or had held himself out to be carrying on the business of undertaking duties connected with burials. Accordingly, I am satisfied that the Defendant had, during that period, conducted the activity of an "undertaker of burials" within the meaning of Section 92AB of the Ordinance. I am also satisfied that the Defendant did open or keep open the Premises for that purpose.

39. As no evidence had been produced by the Defendant of having obtained the relevant licence under the Ordinance, I am satisfied that the Defendant's contravention of the legislation rendered him in breach of clauses 2(h) and (n) of the Tenancy Agreement.

40. I pause here to mention that in arriving at the above conclusion, I have excluded from my consideration the Plaintiffs' evidence regarding the chanting of prayers emanating from the Premises. Although the Defendant's denial seems to be confined only to the playing of music for ceremony of mock funeral and not specifically to the broadcasting of the chanting of prayers, there may be room for argument arising from infelicitous choice of words when the Defendant was answering in English Mr Lo's allegations in Chinese. Therefore, for the purpose of this application I have proceeded on the basis that there is a dispute on this piece of evidence.

41. As will be apparent from this judgment, it becomes unnecessary for me to decide whether the Defendant's conduct also amounted to a breach of Section 4 of the Funeral Parlours Regulation. I will therefore only deal with the question briefly. Section 4 provides:

"(1) Save under and in accordance with a licence granted by the Director, no person shall carry on the business of a funeral parlour."

"Funeral parlour" is defined in Section 3 of the Regulation to mean "a mortuary" which in turn is defined in the Ordinance to mean:

"any premises or place set apart or habitually used for the reception, storage or treatment of human remains."

42. In light of the above definition, and also having regard to Sections 7 to 12 of the Regulation, to qualify as a funeral parlour it is clear that the reception or handling of human remains must be an essential part of the activity conducted at the premises in question. As there is no evidence in the present case that human remains were actually received or handled at the Premises, I am unable to conclude that the Defendant was in breach of the aforesaid Regulation.

43. In this connection, I wish to refer to the letter dated 11 November 2002 from the Food and Environmental Hygiene Department. It appears that the objects and setting described in the letter was consistent with that shown in the photographs of 15 November. The letter stated that the officers of the Department did not find any person "carrying on a business of funeral service" at the Premises during their visits. Such findings, as it seems to me, involved both factual observations as well as legal interpretation of the relevant legislative provisions. Insofar as one interprets the letter to mean that the officers found no evidence of the Premises being used as a funeral parlour as defined in the Regulation, such findings were consistent with the view I have expressed above. However, whatever the interpretation one attributes to the officers' findings, such findings do not in any way affect my views in relation to Section 92AB of the Ordinance.

44. Regarding the other question concerning the use of the Premises as a Chai Tong or for purposes of a similar nature, as very little argument has been advanced to persuade me that the nature of the activities amounted to that of a Chai Tong, I would not be inclined - as it is unnecessary for me to do so - to make a firm determination on the point. But it seems to me that while rites of the kind in question might well be performed in a Chai Tong, the performance of such rites, without more, is insufficient to support a conclusion that the Premises were in fact being used as a Chai Tong or purposes of a similar nature.

The Notice

45. As already noted, the Notice (dated 16 November 2002) gave the Defendant 3 days to remedy the breach. According to my findings above, the breach was not remedied but had continued up to the time when the Plaintiffs forfeited the tenancy. In this connection, the Plaintiffs relied on clause 4(a) of Tenancy Agreement - the usual proviso entitling the landlord to re-enter upon a breach of the terms of the agreement.

46. Mr Ng for the Defendant argued that the Notice was ineffective as regards any contravention of Section 92AB of the Ordinance in that there was no specific mention of a breach by way of being an undertaker of burials in the Notice. I am unable to accept Mr Ng's argument. Whilst a notice, to be effective, is required under Section 58(1) of the Conveyancing and Property Ordinance to specify "the particular breach complained of", it is sufficient if the notice directs the tenant's attention to the particular things of which the landlord complains in order that the tenant may have an opportunity of remedying them before an action to enforce the forfeiture is begun: Halsbury's Laws of England, 4th Edition Reissue, Vol. 27(1), paragraph 514; Hill & Redman's Law of Landlord and Tenant ,Vol. 1, paragraph 8665.

47. In the present case, the Notice specifically referred to the Plaintiffs' objection to the Defendant's use of the Premises for activities relating to funerals or related purposes. In common parlance, funerals encompass the ceremonies connected with burials of the dead: see the Shorter Oxford Dictionary. It must be obvious to the Defendant that the breach complained of related to such of the activities which might reasonably be considered as connected with ceremonies of that nature. In my view, the Notice, although not making express reference to Section 92AB or undertakers of burials, was nevertheless a sufficient notice for the purpose of Section 58(1) of the Conveyancing and Property Ordinance.

Nuisance to Neighbours

48. The Plaintiffs' second complaint is based on what they alleged to be nuisance caused to residents in the neighbourhood. Relevant to this complaint is clause 2(j) of the Tenancy Agreement, by which the Defendant agreed:

"2. (j) Not to permit any noise or allow any music to be produced in the said premises so as to create a nuisance or give cause for reasonable complaint from the occupants of the building or neighbouring premises."

49. First, the Plaintiffs complained that on 15 November the Defendant and his employees harassed and threatened the neighbouring villagers who were staging a protest at the Premises. Secondly, in the course of his argument, Mr Mak alluded to the setting of the Premises as the basis of the nuisance. I need only to deal with these points briefly.

50. First, clause 2(j) is concerned only with nuisance or complaint arising from noise or music. Neither harassment, threat, nor complaints related to the setting of the Premises attract the application of clause 2(j). Secondly, harassment and threat to villagers would hardly give the Plaintiffs a cause of action in their capacity as landlord or trustees in relation to the subject property. Thirdly, the Defendant denied any involvement with the alleged harassment or threat. In the absence of other evidence as to the Defendant's role in the incident, there must be a triable issue on the facts. For these reasons, the Plaintiffs have failed to make out a case for summary judgment on the basis of this complaint.

Failure to Pay Rent

51. The third complaint relates to non-payment of rent for the month of December 2002. Whilst it is not disputed that rent for the month of December was not paid before the Plaintiffs forfeited the tenancy, Mr Mak did not really press this ground for the purpose of summary judgment, realizing obviously that relief would inevitably have to be granted on the basis that the Defendant did tender payment in the amount equivalent to monthly rental in the subsequent months.

Waiver

52. Waiver was pleaded in the draft Defence. However, as no argument has been advanced by Mr Ng on the issue in either his written or oral submissions, I propose only to deal with it briefly. Since the service of the Notice, it is clear that no rent has been accepted before the Plaintiffs exercised their right to forfeit the tenancy. In fact, as has already been noted, the Defendant had defaulted in paying the rent for the December month. As for the subsequent payments tendered by the Defendant, the Plaintiffs made it clear that they were received as mesne profits and not rent. Accordingly, there is no substance in the defence of waiver.

53. I therefore conclude, for the reasons given above, that the Plaintiffs were entitled to forfeit the Defendant's tenancy on 21 December 2002.

Relief Against Forfeiture

54. In invoking the court's jurisdiction to grant relief, the Defendant requested that he be allowed "to move the things as complained by the Plaintiffs into the House so that [he] could carry on with [his] business." I find this request surprising. First, given the Defendant's confirmation that he had complied with the interlocutory injunction granted on 3 January 2003 which required him to cease any activities that might relate to funerals, burials, or operation of a Chai Tong or other related purposes, and his confirmation of having dismantled or removed the offending objects specified in the injunction including the coffins, the paper dolls, the placards, the altar, the furnace, the incense and joss sticks, the "fu" etc., there should be no other "things" to be moved into the House for whatever purpose.

55. Secondly, insofar as the Defendant's confirmation of compliance with the injunction was relied on as a ground for seeking relief - in the sense of having purged the breach - it would have to be viewed against his stated intention of carrying on with "his business" by moving the offending objects into the Premises upon the granting of the relief.

56. Thirdly, since the display of some of those items in the Premises was a cause giving rise to forfeiture in the first place, the Defendant's request is tantamount to asking for permission to continue with the breaches of the tenancy agreement.

57. Fourthly and in any event, as I have rejected as unbelievable the Defendant's allegation of carrying on an agency business at the Premises, there is no evidence to show what other legitimate use the Defendant had for the Premises. It is also noted that the Defendant has adduced no evidence to the effect that he had suffered anything at all by reason of not being able to carry on "his business" at the Premises because of the injunction.

58. I am of the view that on the materials before me the Defendant has failed to put forward any valid basis upon which the court could grant the relief.

Order

59. I will make the following order:

(1) Leave be given to the Defendant to adduce evidence by way of his Third Affirmation dated 23 April 2003 for the purpose of this application;

(2) An order for possession of the Premises, namely, the building erected on Lot No. 964 in Demarcation District No. 26;

(3) Damages to be assessed;

(4) The injunction granted in paragraph 1 of the Order of Chung J on 3 January 2003 do continue until recovery of possession of the Premises by the Plaintiffs.

60. As for costs, I am not minded to accede to the Plaintiffs' request to award costs on common fund basis. I make an order nisi that the Plaintiffs shall have the costs of the Action (including this application).