TING SHUK MAN, SYLVIA v. WONG TAK, by WONG KOWK LEUNG his guardian ad litem

HCA 1440/2016

[2020] HKCFI 409

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1440 OF 2016

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J U D G M E N T

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A. Introduction

1.  This is the trial of a tenancy dispute. 

2.  The dispute has some unusual features.  The Plaintiff is claiming in her own name as landlord under a tenancy agreement (the “2012 TA”). But she signed the 2012 TA, at least on its face, as agent for a named landlord.  She also admittedly has neither title nor indeed any interest in the leased property.  She claims however that although she was described in the 2012 TA as an agent and on its face signed as such, she in fact signed it personally as principal and landlord.  She also seeks to, as between her and the Defendant, rely on the doctrine of tenancy by estoppel.  On those bases she is suing the Defendant for possession of the leased property, injunction restraining further possession, arrears of rent and mesne profit.

3.  The main issues which this Court is called upon to resolve are (1) whether the Plaintiff entered into the 2012 TA personally as principal and landlord, (2) whether there have been misrepresentations on the part of the Plaintiff in respect of her capacity with respect of the 2012 TA so that the Defendant becomes entitled to have the 2012 TA rescinded, and (3) whether the doctrine of tenancy by estoppel operates in the Plaintiff’s favour so that the Defendant is barred from denying that the 2012 TA is valid and enforceable by the Plaintiff against him.

B.  The facts

4.  The parties have each called one witness — the Plaintiff herself, and Wong Kwok Leung for the Defendant.  The parties differ only on a couple of minor factual matters.  The differences are non-consequential. I will nonetheless deal with them below specifically.  Save those matters, the facts are largely not in dispute.  The following are extracted from the witness statements the Plaintiff [1] and Wong Kwok Leung [2] and their respective oral evidence.

B.1.  Shop D, Portion B, and the parties

5.  The subject matter of the claim is Portion B (“Portion B”) of Shop D, Ground Floor, Rose Mansion, No 1 Prat Avenue, Kowloon, Hong Kong, (“Shop D”).  Shop D was originally one single shop.  It was divided into Portion A and Portion B in 1980.  We are only concerned with Portion B.

6.  The registered owner of Shop D has since 19 February 1959 (till date) been Mr Chiong Yin (張賢, apparently also known as Bobby K Chiong and 張泰康, “Mr Chiong”).  The registered ownership has remained the same despite the division of Shop D into Portions A and B. 

7.  Mr Chiong passed away in Spain on 23 June 1998[3]. According to the Plaintiff [4]:

“ …in about 2008, Father told me that Mr. Chiong has [sic] already passed away in Spain without leaving a will. Father showed me the death certificate of Mr. Chiong and told me that Mr. Chiong was not married with no issue. He was not close with his siblings and family members.”

8.  The Plaintiff’s father was Mr Ali Ting (丁榮祖, “Mr Ting” or “Father”).  Mr Ting was born in 1930.  He was a merchant by occupation and a Haji of the Islamic community.  He passed away in Hong Kong on about 18 September 2010.  He died intestate.  The Plaintiff has never been appointed administratrix of her Father’s estate.  There is in fact no evidence suggesting that anyone has ever been so appointed.

9.  Mr Chiong and Mr Ting had been close friends.  Apart from being business partners, they were both members of the Islam group and attend the same mosque.

10.  Mr Ting had on different occasions told the Plaintiff that Mr Chiong resided in Spain and rarely returned to Hong Kong.  The Plaintiff knew that her Father had for a long time been looking after for Mr Chiong some of his landed properties in Hong Kong.  Shop D had been one of them.

11.  The Defendant was born in the Mainland in 1926.  He is now in his 90’s.  He started his business in selling Chinese herbal medicine in the 1960s.  In 1980, he relocated his shop to Portion B.

12.  The Defendant has 2 sons: Wong Kwok Leung and Wong Kwok Fai (together with the Defendant, collectively the “Wongs”).  They have been assisting the Defendant in his business.  Wong Kwok Leung is now the guardian ad litem of the Defendant.

B.2.  Commencement of occupation by the Defendant, and subsequent tenancies with Mr Chiong personally

13.  In 1980, Mr Chiong as landlord and the Defendant as tenant entered into an oral tenancy agreement in respect of Portion B (the “1980 TA”). The Defendant then took possession of Portion B and relocated his business there. 

14.  Subsequent to the 1980 TA, and in 1983, 1986, 1991 and 1996, Mr Chiong personally as landlord and the Defendant as tenant entered into 4 further written tenancy agreements (the “1983 TA”, “1986 TA”, “1991 TA” and “1996 TA” respectively) in respect of Portion B.  The 1983 TA could not be located and has not been produced before me.  The 1986 TA [5], 1991 TA [6] and 1996 TA [7] are dated 1 January 1986, 1 April 1991 and 10 April 1996, and were for terms of 5 years, 5 years and 4 years respectively.

15.  As has been mentioned above, Mr Chiong passed away in Spain on 23 June 1998.

B.3.  Tenancies with Mr Ting as the agent

16.  Between the latter part of 1998 and 2008, 4 further written tenancy agreements were entered into in respect of Portion B.  In each of them, Mr Ting signed expressly as the agent of the landlord [8] of the one part, and the Defendant as the tenant of the other.  They are not dated.  Each of them was for a term of 3 or 4 years, covering cumulatively the continuous period from 1 January 1999 to 31 December 2011.  They have been referred to as the “1999 TA”, “2003 TA”, “2006 TA” and “2009 TA”.

B.4.  The introduction of the Plaintiff, and the 2012 TA

17.  In about 2010, Mr Ting introduced the Plaintiff to the Defendant and his sons.  According to the Plaintiff [9]:

“ 23. In about 2010, Father and I visited [Portion B] together for the purpose of formally introducing me to the Defendant. Due to the lapse of time, I cannot recall the exact time but I remember that during the visit, the Defendant and his two sons…were all present.

24.  Father introduced me to the Defendant as his daughter and that I would receive and collect the rental of [Portion B] on Father’s behalf from that time onwards.  Father explained to the Defendant that as he would travel to China for preaching and for rest from time to time, if the Defendant could not reach him, he could contact me.  The Defendant agreed.  But what Father did not tell the Defendant was that in fact he was suffering from terminal cancer and he knew he might not live long.  At that time, the relationship between the Defendant and Father was harmonious. After the introduction, the Defendant had been paying the rentals to me as requested by Father.”

18.  Subsequently, shortly before the expiry of the 2009 TA, another tenancy agreement (ie the 2012 TA) was entered into.  It is not dated (but stamped on 6 January 2012).  The circumstances in which the 2012 TA was entered into, according to the Plaintiff [10], were as follows:

“ 25. … In about end of 2011, I approached the Defendant to discuss the renewal of the tenancy of [Portion B]. We went to a nearby restaurant as the Defendant’s shop was noisy and crowded. The Defendant came along.

26.  At the meeting with the Defendant, I requested for an increase of rent with the other terms of the tenancy agreement remained the same as before. The Defendant agreed. The discussion went smoothly and the Defendant was respectful to me. He even asked me which bank would be more convenient for me if he were to pay rent.

27.  On or about 1^st January 2012, I entered into [2012 TA] with the Defendant in respect of [Portion B]. By the [2012 TA], it was agreed that, among other terms:

(a)  [Portion B] was leased to the Defendant for a period of 2 years from 1^st January 2012 to 31^st December 2013;

(b)  The monthly rental was HL$25,500.00 (inclusive of rates and government rent) and shall be paid on the 1^st day of the month;

(c)  The rental deposit was HK$51,000 (‘Rental Deposit’) to be paid by the Defendant;

(d)  The Rental Deposit would be set off against the outstanding rentals in the event that the Defendant defaults in paying the monthly rental.

28.  I recall that I took the draft [2012 TA] to [Portion B] for the Defendant to sign.

29.  The Defendant paid the Rental Deposit by way of cheque in my favour at the time of the signing of the [2012 TA].

30.  The [2012 TA] was indeed a replication of the previous tenancy agreements prepared by Father.  As I was not familiar with the legal concepts and had not taken any legal advice and for convenience, I merely adopted the tenancy agreements prepared by my Father to continue with the leasing of [Portion B] to the Defendant for convenience.  At that time, I firmly believe that I was fully entitled to lease [Portion B] to the Defendant and he (as the tenant) must deliver [Portion B] back to me in vacant possession at the end of the [2002 TA].”

19.  In respect of the 2012 TA:

(a)  the Plaintiff is described on its face as the agent of the landlord. The starting words of the 2012 TA are as follows:

「立租約人業主張泰康Mr. Bobby Chiang代理人丁淑文

(身份証號碼XXXXXXX(X) [11])(甲方) 租客黃德

(身份証號碼XXXXXXX(X) [12])(乙方) 玆雙方同意訂立租約如下:

… 」

(b)  at the bottom left hand corner of the 2012 TA, the Plaintiff’s signature appears above a line.  Immediately under that line are the following words which suggest that the Plaintiff appended her name as the landlord’s agent:

「 _____________

  業主代理人

  丁淑文

  身份証號碼XXXXXXX(X) [13]」

20.  Pursuant to the 2012 TA, the Defendant paid the rental deposit and the rent for the month of January.  The rental deposit was paid by cheques “drawn in [the Plaintiff’s] favour” [14].

B.5.  Events subsequent to the execution of the 2012 TA

21.  In early February 2012, the Defendant received from the Inland Revenue Department a letter dated 2 February 2012 (the “IRD Letter”). It was addressed to the “Administrator of the Estate of the Late Chiong Bobby” and posted to Shop D.  It related to certain outstanding tax of Mr Chiong.

22.  According to Mr Wong Kwok Leung [15], it was only upon the receipt of the IRD Letter when he and his father first knew that Mr Chiong had died.  The Plaintiff does not dispute this.

23.  Also according to Wong Kwok Leung [16]:

(a)  upon receipt of the IRD Letter, his brother (ie Wong Kowk Fai) telephoned the Plaintiff.  During that telephone conversation, Wong Kwok Leung was sitting next to his brother;

(b)  the Plaintiff upon cross-examination agreed that this telephone did take place.  The Plaintiff accepted that during that conversation, Wong Kwok Fai asked to talk to her Father.  The Plaintiff did not tell him that her Father had passed away as that was personal to her family.  She said her Father was travelling around different places in the Mainland and had not been back to Hong Kong for a long time.  She said that Wong Kwok Fai asked after her Father and asked many times when he would be back.  She said she asked what question Wong Kwok Fai had, and he replied that they would talk upon her Father’s return;

(c)  When asked during cross-examination as to whether Wong Kwok Fai in that telephone conversation asked “for proof that Ting and the Plaintiff had been authorized by [Mr Chiong] to handle the tenancy of [Portion B]” [17], which Wong Kwok Leung said his brother did, the Plaintiff replied firstly that she had no impression of that, and subsequently that she could not remember Wong Kwok Fai having said that.

24.  Whether Wong Kwok Fai during that telephone conversation asked for proof that Mr Ting and the Plaintiff had been authorized by Mr Chiong to handle Portion B is one of the few factual areas that is subject to dispute. In this regard, and for the following reasons, I accept Wong Kwok Leung’s evidence:

(a)  Upon receipt of the IRD Letter, the Wongs knew for the first time that Mr Chiong had died.  It makes sense for them to try to seek clarification from the Plaintiff in respect of hers and her Father’s authority to handle Portion B;

(b)  Wong Kwok Fai, as things turned out, did call the Plaintiff.  I find it inherently improbable that he, having called the Plaintiff, would not have asked the Plaintiff for such proof;

(c)  I further note the Plaintiff’s evidence in this regard during cross-examination, that she did not positively say that Wong Kwok Fai had not so asked, but just that she had no impression of that or that she could not recall he having so asked.  That is also different from her evidence at §33 of P/WS#1, where she positively asserted that Wong Kwok Fai during that call:

“ …mentioned nothing about the capacity of Father or me as the agent of Mr Chiong to handle the tenancy matters or the reason of not paying rent.”

(d)  That the Wongs did not get the proof requested is also consistent with their subsequent conduct of stopping payment of further rentals under the 2012 TA;

(e)  It is true that Wong Kowk Fai has not been called as a witness.  But the Plaintiff accepts that the telephone call has indeed taken place.  I accept Wong Kwok Leung’s evidence that he was beside Wong Kwok Fai when the phone call took place.  This is not a case for drawing adverse inference against the Defendant for not calling Wong Kowk Fai, as Mr Chan, counsel for the Plaintiff, has invited me to do.

25.  As I have mentioned above, the Defendant from February 2012 stopped paying rentals under the 2012 TA.  Wong Kwok Leung said at §§48 to 50 of WKL/WS#1 that:

“ 48. My father, Wong Kwok Fai and I had been waiting for the Plaintiff and/or [Mr] Ting to contact us after [Mr] Ting returned to Hong Kong. However, neither the Plaintiff nor [Mr] Ting contacted my father or Wong Kwok Fai or me after the aforesaid conversation.

49. Owing to the failure of the Plaintiff to prove her capacity as the authorized agent of [Mr Chiong] in making the 2012 TA, my father stopped paying rent to the Plaintiff since February 2012 and instead my father came to make payment of rent into a bank account of my father himself pending the resolution of the question as to whether the Plaintiff was indeed the authorized agent of [Mr Chiong] with respect to the [2012 TA].

50.  Although my father stopped paying rent to the Plaintiff since February 2012, the Plaintiff had never demanded my father to pay rent or to vacate from [Portion B] and indeed the action herein which was commenced without any prior notice to my father was the first time that the Plaintiff alleged that my father had failed to pay rent to her.”

26.  Wong Kwok Leung has produced a number of account pay-in slips in support of his evidence that the Defendant had made payment of rentals into an account of his.  A page of the statement of that account has also been produced, showing that it had a balance of HK$1.7m odd as at October 2017.  Mr Chan cross-examined Wong Kwok Leung in respect of the absence of certain pay-in slips. I do not find that materially adversely affects Wong Kwok Leung’s evidence on this issue, which is on the whole supported by documents.  I accept Wong Kwok Leung’s evidence in this regard.

27.  Another area of factual disputes goes to whether the Plaintiff had made any demand for payment of rent or vacation of Portion B prior to the issue of the Writ herein.  The Defendant’s position is that there had been none, neither oral nor written [18]. The Plaintiff’s position is that she did that orally, both over the phone and by personally attending Portion B.  I find the Plaintiff’s evidence in this regard inherently improbable:

(a)  If the Plaintiff had indeed made demands, the inherent probability is that the Wongs would have taken the opportunity to seek clarification from her as to hers and her Father’s authority to handle Portion, and that if none had been forthcoming, they would have cited the absence of such proof as their reason for stopping to pay rent;

(b)  In §35 of P/WS#1, the Plaintiff however said that:

“ As far as I can remember, I have visited [Portion B] personally 3 to 4 times to demand for rent payment. I have also requested them to vacate [Portion B] as soon as possible. On each occasion, the Defendant, Wong Kwok Fai or Wong Kwok Leung only said that they were not going to pay any rent. Despite repeated demands and requests, the Defendant failed and still fails to pay the outstanding rental and vacate the [Portion B].” (emphasis added)

(c)  I find the Plaintiff’s evidence that the Wongs did not give any reason for the non-payment of rentals inherently improbable;

(d)  I note also that even after lawyers had been engaged, still no written demand had been made.  At least no such demand letter has been produced before me.

I accept Wong Kwok Leung’s evidence in this regard.

C.  The Parties’ pleaded cases

C.1.  The Plaintiff’s claim

28.  The Writ and the Statement of Claim are both dated 1 June 2016.  The Plaintiff pleads specifically that she “was and is not the personal representative of either [Mr Chiong] or [Mr Ting]” [19] and that she “was not appointed as the agent of [Mr Chiong] in relation to the rental and management of Shop D” [20] (emphasis added).  She pleads, on the issue of her capacity when signing the 2012 TA, at §2(a) that:

“ The Plaintiff (albeit described in the [2012 TA] as [Mr Chiong’s] agent or lawful representative) agreed (as the principal and landlord) to lease [Portion B] to the Defendant (described in the [2012 TA] as the tenant) for a period of 2 years.”

29.  Relying on the 2012 TA, the Defendant’s non-payment of rent since February 2012 and the Wongs’ continual occupation of Portion B, the Plaintiff seeks (1) an order of possession in respect of Portion B, (2) an injunction against the Defendant “to restrict him and/or his agent and/or servant and/or employee howsoever from trespassing into and/or entering into and/or using and/or remaining in [Portion B], (3) arrears of rent of HK$535,500; and (4) mesne profit.

C.2.  The Defendant’s Defence and Counterclaim

30.  The Defendant’s Defence and Counterclaim was first filed on 21 September 2019 and later amended on 9 January 2018 (the “AD&C”). The Defendant avers that:

(a)  there has been misrepresentations (the “said Misrepresentations”) on the part of the Plaintiff as to her capacity with respect to the 2012 TA [21] (made orally in about end of 2011 to the Defendant and Wong Kwok Leung [22] and in writing on the face of the 2012 TA [23]);

(b)  further or alternatively, by signing the 2012 TA as the agent of Mr Chiong, the Plaintiff warranted to the Defendant that she was authorized to enter into the 2012 TA as the authorized agent of Mr Chiong, when in fact she was not [24];

(c)  because of the said Misrepresentations and / or the Plaintiff’s breach of warranty of authority, the 2012 TA was not valid or enforceable against the Defendant [25];

(d)  Even if the 2012 TA was valid or enforceable against the Defendant, the Plaintiff as mere agent of Mr Chiong has no personal right to enforce the same against the Defendant in her own name [26];

(e)  By way of counterclaim, the Defendant avers that:

“ 16 (1) By reason of the said [Misrepresentations] and/or the Plaintiff’s said breach of warranty of authority, the 2012 TA is invalid or unenforceable by the Plaintiff against the Defendant;

(2)   Further or alternatively, by reason of the said [Misrepresentations] the Defendant is entitled to rescind the 2012 TA.

(3)   Without prejudice to the matters aforesaid, the Defendant… says that in any event the Plaintiff has no right to enforce the 2012 TA in her own name against the Defendant.”

 (f)  The Defendant therefore counterclaims for:

“ 1.  A declaration that the 2012 TA is invalid and unenforceable against the Defendant.

2.  In the alternative to 1, rescission of the 2012 TA.

3.  Still in the alternative to 1 or 2, a declaration that the Plaintiff cannot enforce the 2012 TA in her own name as she has no personal right under it.

4.  Return of the said deposit and the sum of HK$25,500.

5.  Damages for the said [Misrepresentations] and/or the Plaintiff’s said breach of warranty of authority.”

C.3.  The Plaintiff’s reply

31.  In §17 of her Reply, the Plaintiff pleads that:

“ …the Plaintiff avers that the Defendant is (in any event) barred by the tenancy by estoppel and/or estoppel by convention from disputing that Plaintiff and the Defendant had signed and executed the 2012 TA and the same is valid and enforceable by the Plaintiff against the Defendant.”

32.  Despite having been pleaded, “estoppel by convention” is no longer relied upon [27].

D.  The Issues

33.  The parties have not been able to agree upon a list of agreed issues.  I have considered their respective versions.  I can group them under three main issues:

(a)  The “Contractual Capacity Issue”:

whether the Plaintiff entered into the 2012 TA personally as principal and landlord, or only as purported [28] agent for Mr Chiong;

(b)  The “Misrepresentation Issue”:

(i)  whether there have been misrepresentations by the Plaintiff as alleged;

(ii)  whether reliance by the Defendant has been shown;

(iii)  if so, the question of relief;

(c)  The “Tenancy by Estoppel Issue”:

whether the doctrine of tenancy by estoppel operates in the Plaintiff’s favour so that the Defendant is estopped from denying the Plaintiff’s title or entitlement to enforce in her own name the 2012 TA;

(d)  The “Breach of Warranty of Authority Issue”:

(i)  whether there has been any breach of warranty of authority on the Plaintiff’s part as alleged;

(ii)  if so, the question of relief.

E.  The Contractual Capacity Issue

34.  The first main issue is whether the Plaintiff signed the 2012 TA personally as principal and landlord so as to enable her to sue on it in her own name, or whether she did so as purported agent for Mr Chiong.

35.  I have set out the relevant contents of the 2012 TA. On the face of the 2012 TA, the Plaintiff is identified as the agent of the landlord Mr Chiong (「業主張泰康Mr. Bobby Chiang代理人丁淑文」), and signed as such (「業主代理人」).

36.  I have reproduced §2(a) of the Statement of Claim in which the Plaintiff pleads that albeit described in the 2012 TA as Mr Chiong’s agent or lawful representative, she actually agreed to lease Portion B to the Defendant “as the principal and landlord”.

37.  In his Opening Submissions [29], Mr Chan submits that “in law, when P signed the 2012 TA in her own name, she did so as the principal and in her own right as opposed to being an agent of [Mr Chiong]”.  On the other hand, Mr Dawes SC, counsel for the Defendant, submits that in the light of the law, and the intentions of the parties as ascertained and gathered from the contents of the 2012 TA and the surrounding circumstances, “it is not arguable that P signed the 2012 TA in her own right, and/or that she had a right to sue on such agreement” [30].

E.1.  THE LAW

38.  Whether the Plaintiff signed the 2012 TA personally as principal and landlord or as purported agent for Mr Chiong depends on the intentions of the parties as may be gathered and ascertained from the 2012 TA upon a proper interpretation of the same.  As summarized in Bowstead and Reynolds on Agency (21^st ed) Article 99 at §9-036:

“ The question whether the agent is to be deemed to have contracted personally, in the case of a contract in writing other than a deed, bill of exchange, promissory note or cheque, depends upon the intention of the parties, as appearing from the terms of the written agreement as a whole, the construction of which is a matter of law. The party concerned may act as agent in some respects and as principal (including as trustee) in others.”

39.  In Tanner v Christian 119 ER 217:

(a)  the issue before the court was whether an agent who signed in his own name without the principal signing was personally liable on the same;

(b)  Lord Campbell CJ at 218 observed that:

“The real question is whether the defendant was intended to be personally liable on this contract: and, on looking at the frame of the agreement as a whole, I come to the conclusion that he was.”

(c)  Lord Wightman J along the same line observed at §219 that:

“There is no doubt that a person, acting for and on behalf of another, may contract in such terms as to bind himself personally. In each case the question is whether the intention that he should do so appears. One test is, to see who is by the provisions of the contract to act in the performance of it.”

40.  In deciding this issue, previous decisions are of limited value — see Bowstead and Reynolds at §9-037:

“ The cases on this topic should only be treated as single instances exemplifying the application of a rather imprecise principle; much turns on the particular context of each contract ... Generalisations about particular formulae are dangerous.”

41.  Similarly, in Champan v Smith [970] 2 Ch 97, Parker J, in deciding whether a mortgagee not in possession entered into an agreement for tenancy personally, observed at p 103 that:

“ My attention was called to a great many authorities bearing on the question whether a person expressed to contract as agent, either for a named or an unnamed principal, can himself be personally liable on the contract. Having come to the conclusion that this question is in each case a question of construction having regard to the surrounding circumstances, I need not consider these authorities in detail …”

42.  With the limited value of previous authorities and the danger of generalizations flagged up, the learned authors of Bowstead and Reynolds at §9-037 sets out 3 starting propositions:

“ The following rules have, however, appeared in previous editions and still seem valid starting points:

(a) If the contract is signed by the agent in his own name without qualification, he is deemed to have contracted personally unless a contrary intention plainly appears from other portions of the document.

(b) The mere fact that the agent is described as an agent, director, secretary, manager, broker, etc., whether by words connected with or forming part of the signature, or in the body of the contract, and whether or not the principal is named, raises no presumption that the agent did not intend to contract personally; but here again an intention to contract as agent only may be gathered from the whole document and surrounding circumstances.

(c)  But if the agent adds words to his signature, indicating that he signs as agent, or for or on behalf or on account of a principal, he is deemed not to have contracted personally, unless it is plain from other portions of the document that, notwithstanding such qualified signature, he intended to bind himself. This is so even though he does not name his principal.  But this proposition should be read subject to Article 102(2) regarding the liability of agents under trade custom.”

E.2.  Parties’ intentions as gathered from the 2012 TA and relevant factual matrix

43.  Both Mr Chan and Mr Dawes accept that when construing the 2012 TA for the purpose of deciding the parties’ intentions, I am entitled to look at the several tenancy agreements which preceded it and the circumstances in which they were entered into.  That is in my view clearly correct.

44.  Having considered the following matters and reasons, I conclude that the parties’ intentions were clearly that the Plaintiff entered into the 2012 TA as agent for Mr Chiong:

(a)  Mr Chiong has at all times been the registered owner of Shop D (including Portion B);

(b)  The initial tenancies (the 1980 TA, 1983 TA, 1986 TA, 1991 TA and 1996 TA) were entered into between Mr Chiong personally and the Defendant;

(c)  There is no evidence that Mr Ting had any interest in Portion B. He had been acting only as agent for Mr Chiong in looking after his landed properties in Hong Kong (including Portion B);

(d)  In all of 1999 TA, 2003 TA, 2006 TA and 2009 TA, Mr Ting contracted expressly as Mr Chiong’s agent;

(e)  The Plaintiff accepts that her Father entered into those tenancies as agent for Mr Chiong.  It is not her case that her Father in fact intended to sign as principal (like she says she did).  At §1(c) of her Statement of Claim, she pleads that:

“ Prior to his death, the [Father] had been the lawful agent of [Mr Chiong] and responsible for the rental and management of [Portion B] which was and is owned (legally and beneficially) and registered in the sole name of [Mr Chiong].”

(f)  According to the Plaintiff herself, when introduced by her Father to the Wongs in about 2010, she was introduced “as his daughter and that I would receive and collect the rental of [Portion B] on Father’s behalf ” [31]. In effect, she was introduced to the Wongs as her Father’s agent (or in other words, an agent’s agent);

(g)  The Plaintiff has never had any interest in Portion.  She has never been appointed personal representative of either Mr Chiong or her Father, or their respective Estates.  Nor was she an agent of Mr Chiong [32];

(h)  Then came the 2012 TA.  There is no evidence which suggests that the pre-existing state of affairs had changed, either expressly or by conduct;

(i)  The 2012 TA was drafted by the Plaintiff.  She could not even rely on the contra proferendum rule;

(j)  Again according to the Plaintiff herself, other than an increase in rent, “other terms of the tenancy agreement remained the same as before” [33];

(k)  Then, on the face of the 2012 TA, not only did she describe herself as agent for Mr Chiong, she also appended her signature immediately above the words “業主代理人”;

(l)  In my view, if the Plaintiff had intended to sign as principal, she would not have drafted the 2012 TA in that way.  Lack of legal knowledge could not have explained that;

(m)  It is also useful here to recall the test suggested by Lord Wightman J in Tanner v Christian, namely “who is by the provisions of the contract to act in the performance of it” (which Mr Chan calls the “performance test”).  The Plaintiff had no interest in Portion B.  She could never have been able to personally and as principal lease Portion B to the Defendant pursuant to the terms of the 2012 TA.  She was never in any position as landlord “to act in the performance of” it;

(n)  The rental deposit might have been paid by a cheque drawn in her favor, but that is entirely consistent with she being paid the same as an agent.

E.3.  Conclusion on this issue

45.  I have therefore no hesitation in rejecting her case and any related submissions that she signed the 2012 TA personally “as principal and landlord”.

F.  The Misrepresentation Issue

F.1. Whether any misrepresentation

46.  As I have summarized above, the Defendant’s pleaded case is that the said Misrepresentations were made by the Plaintiff (1) orally to him and Wong Kowk Leung in about end of 2011, and (2) in writing on the face of the 2012 TA.

47.  I consider the alleged oral misrepresentations first.

48.  The Defendant did not testify.

49.  Under cross-examination, Wong Kwok Leung accepted that he was not involved in the negotiation of the 1999 TA, 2003 TA, 2006 TA and 2009 TA.  When it was suggested to him that the 2012 TA was not signed as a result of any misrepresentation, he said that the 2012 TA was prepared by the Plaintiff, that the Plaintiff and the Defendant did not sign it inside Portion B, and he was not clear about its contents.

50.  I am not satisfied on the evidence that the Defendant has proved any oral misrepresentation by the Plaintiff.

51.  I next consider the alleged written misrepresentation.

52.  In so far as the contents of 2012 TA are concerned:

(a)  the 2012 TA was drafted by the Plaintiff;

(b)  I have set out its relevant contents above.  The Plaintiff is on its face described as agent of Mr Chiong.  She appended her signature immediately above the words “業主代理人”;

(c)  the Plaintiff has made in my view clear written representations in the 2012 TA that she was agent of Mr Chiong with respect to the leasing of Portion B, and that she signed the 2012 TA as such.

53.  “The Plaintiff was not appointed as the agent of [Mr Chiong] in relation to the rental and management of Shop D” [34]. This is the Plaintiff’s own pleaded case.  The representations made on the face of the 2012 TA that the Plaintiff was agent of Mr Chiong and that she signed as such are hence false.

54.  Given the Plaintiff’s own case that she was not appointed as agent of Mr Chiong, the only inference is that the plaintiff made those written representations intentionally knowing them to be false.

F.2. Whether any reliance and inducement

55.  In both his Opening and Closing Submissions, Mr Chan relies upon BV Nederlandse Industrie van Eiprodukten v Rembrandt Enterprises Inc [2019] 3 WLR 1113 and submits that the onus is on the Defendant to prove that he has relied on the misrepresentations and been thereby induced to enter into the contract.  He relies in particular on the following summary of the relevant legal principles by Longmore LG at §32:

“ In the light of these authorities it seems to me that the law at the end of the 19th century had assimilated the requirement of inducement in the tort of deceit and in actions for rescission for fraudulent misrepresentation and could be stated as being that the representee had to prove he had been materially ‘influenced’ by the representations in the sense that it was ‘actively present to his mind’ to use Bowen LJ’s phrase; that, whereas there is a presumption that a statement, likely to induce a representee to enter into a contract, did so induce him, that is merely a presumption of fact which is to be taken into account along with all the evidence. There was no requirement as a matter of law, that the representee should state in terms that he would not have made the contract but for the misrepresentation but the absence of such a statement was part of the overall evidential picture from which the judge had to ascertain whether there was inducement or not. The fact that there were other reasons (besides the representation) for the claimant to have made the contract did not mean that he was not induced by the representation made. In so far as Reynell v Sprye 1 De GM & G 660 had said that there was no need for evidence from the claimant or that it was sufficient if the claimant ‘might’ have made the contract, if there had been no representation, that did not represent the law at any rate if ‘might’ meant something different from ‘influencing’ his decision in deciding whether to make the contract.”

56.  Those principles are not in dispute.

57.  Mr Chan in his Closing relies further on Nip Wun Lan v Chan Oi Ling [1985] 2 HKC 105:

(a)  Mr Chan submits that:

“ …Kempster JA in dismissing the appeal, held that there was no direct evidence from the plaintiff on the pleas of misrepresentation and that proved to be fatal.”

(b)  It should be noted that what Kempster JA observed there were that there was no direct evidence from the plaintiff that she was induced to take a lease of the premises in question [35], and that it was quite open for the trial judge to find on the evidence before him that the plaintiff had not been induced in any of the pleaded ways [36]. His Lordship did not lay down any hard and fast rule that misrepresentations could only be proved by direct evidence;

(c)  Further, the assessment of evidence in each case turns on its own facts.  I respectfully echo the following observations made by Fuad JA [37] also in Nip Wun Lan, that:

“ As regards this authority, it is hardly necessary to state that each case where misrepresentation is alleged is different and governed by its own facts and that great caution is necessary before seeking to extract principles of general application from an individual case.”

58.  I come back to the facts and evidence in the present case. I accept Mr Dawes’ submissions in this regard [38] that it is self-evidence that the Defendant must have relied upon the written parts of the said Misrepresentations as to the Plaintiff’s capacity in entering into the 2012 TA.  The clear inference is that the Defendant must have been induced thereby.  He would not have entered into the 2012 TA with a mere intermeddler with no title or interest in Portion B, and who was not authorized agent of Mr Chiong.  It defies common sense to suggest otherwise.

F.3.  The said Misrepresentations as to capacity immaterial?

59.  In his Opening [39], Mr Chan submits that:

“ whether P has (in fact) made any misrepresentation as alleged (which is denied), is not material to the validity of the 2012 TA. What is crucial and determinative is the trite legal principle that a tenancy agreement confers exclusive possession, not title, to the tenant.”

60.  I have no hesitation in rejecting that submissions.  In my view, in the context of a tenancy agreement, a representation that the signor was the landlord’s agent is clearly a material one.  As I have observed above, it defies common sense to suggest that a potential lessee would be prepared to enter into a tenancy agreement with a mere intermeddler who has no title or interest in the property intended to be leased, and who is not an authorized agent of the landlord.

F.4. The Defendant’s entitlement to rescind the 2012 TA as a result

61.  Mr Dawes, citing Chitty on Contracts, 33^rd ed, at §7-112, submits in his Opening [40] that it is well established that misrepresentation entitles a party to rescind the 2012 TA.

62.  Mr Chan on the other hand submits in his Opening [41] on the strength of Thorpe v Fasey [1949] 1 Ch 649 that:

“ 52. … D’s case for rescission will ultimately hinges on whether he could (at the end of the day) satisfy the strict legal prerequisite to fully restore (or restitute) to P the benefits derived by him under the 2012 TA in the light of the entrenched legal principle that if a contract is to be rescinded it must be rescinded in toto …

…

   55. A fortiori, rescission is impossible to be granted to D given that D has been in full occupation of Portion B, Shop D for the entire leasehold period under the 2012 TA since 1^st January 2012 and benefiting from its immediate and complete possession …”

63.  In Thorpe v Fasey, Wynn-Perry J, having referred to and considered Hunt v Silk (1804) 102 ER 1142, observed at p 663 that:

“ … As I read that judgment, there is the statement of what Lord Ellenborough regarded as a well-established general principle that where a contract is to be rescinded at all it must be rescinded in toto, and the parties put in statu quo, and he then follows that general statement with its application to the facts of the particular case, ending with a reiteration of the essential elements that must exist as a condition precedent for the granting of the relief of rescission, namely, that the parties should be capable of being put in statu quo.”

64.  Mr Dawes does not dispute the correctness of Thorpe v Fasey.  He submits, on the facts of this case, that:

“ D disagrees with such analysis [42], for the simple reason that the alleged ‘benefit’ enjoyed by D has nothing to do with P. It is also D’s case that its occupation has and had nothing to do with the 2012 TA. While it may be said against D, by the true owner of the [Portion B] (whether this be the estate of [Mr Chiong] or otherwise, that he has been in wrongful occupation thereof, and hence ought to yield up the [Portion B] to such true owner and to pay mesne profits, it is neither here nor there in relation to the balance between P and D. If the court finds that P indeed committed misrepresentations justifying rescission, that also confirms there could have been no tenancy by estoppel, or any other basis for P’s claims. In other words, for parties to be ‘put in statu quo’, requiring P to repay to D the Deposit, and the 1 month’s rent paid, is what ought to be done.” (Mr Dawes’ original emphasis)

65.  On this sub-issue, I accept Mr Dawes’ submissions:

(a)  On the Defendant’s side, immediately before the 2012 TA was signed, the Wongs were in occupation of Portion B, and had been so since 1980.  The only party who could have evicted them was Mr Chiong’s estate.  No action by Mr Chiong’s estate for their eviction had been initiated;

(b)  On the Plaintiff’s side, she at that same time (or at any time) had no title or indeed any interest in Portion B.  She was not the administratrix of either the estate of Mr Chiong or her Father.  She was not an authorized agent of Mr Chiong.  She had no personal capacity to enter into 2012 TA, or to receive the rental deposit, or the rent for January 2012;

(c)  The above was the situation as at the time immediately before the 2012 TA was signed.  That was the “statu quo”;

(d)  The facts in this case are distinguishable from those of Thorpe v Fasey, where the agreement was construed as being a single sale for a single purchase price which had been partly performed [43].

66.  By reasons of the above, my view is that the relief of rescission remains open to the Defendant, and he is entitled to the same on the basis of the said Misrepresentations as discussed above.

G.  The Tenancy by Estoppel Issue

67.  It is important to make clear at the outset what this Tenancy by Estoppel Issue is about.  It is, in the context of this case, a very specific one.  In that sense it is a narrow one.  The context is, as I have now found, that the Plaintiff did not enter into the 2012 TA personally as principal and landlord. She was at best a purported agent (as even she herself says that she was not an agent).  The issue is therefore whether the doctrine of tenancy by estoppel operates in the Plaintiff’s favour despite her contractual capacity so that the Defendant is estopped from disputing the validity and enforceability of the 2012 TA.

G.1.  The parties’ stances

68.  Mr Chan submits that the Defendant is barred by the principle of tenancy by estoppel from disputing the validity and enforceability of the 2012 TA against him as the tenant [44], and that:

“ In any event … P submits that P’s purported capacity in entering into the 2012 TA is immaterial as the 2012 TA should be enforceable as between P and D so long as D remains in possession of [Portion B] and D is therefore estopped from denying the title of P.”

69.  Mr Dawes submits that this issue of tenancy by estoppel will stand and fall together with the issue on the Plaintiff’s capacity when executing the 2012 TA.  He submits in his Opening that:

“ 15. … P must prove she contracted as principal in order to rely on tenancy by estoppel …

  16. In other words, P must establish (for the purposes of tenancy by estoppel) that D acknowledged her as the landlord, i.e. that D accepted a lease from her and going into possession, and paying rent to her (in her own right). If it is shown that D, throughout the years and at the time of the 2012 TA, acknowledged [Mr Chiong] as the landlord (with [Mr] Ting and then P, as his authorised agent), and intended to accept the leases, and to pay rent to, [Mr Chiong] (through [Mr] Ting and later, P), there can be no tenancy by estoppel … ” (All Mr Dawes’ original emphasis)

70.  Mr Chan does not accept that.  He submits in his Closing [45] that:

“ …the Contractual Capacity Issue is neither dispositive nor determinative of P’s case. Even if the Court were to rule against P on the Contractual Capacity Issue, P submits that the answer to the Tenancy by Estoppel Issue will still be fatal to D’s case. Under tenancy by estoppel, D is estopped from challenging the 2012 TA to the effect that (a) he signed it, (b) as a tenant and (c) in respect of [Portion B].”

71.  To be successful, Mr Chan has to show in law that Defendant is in the context of this case not only estopped from denying the validity and enforceability of the 2012 TA, but is also estopped from denying the Plaintiff’s title and her entitlement to enforce the same in her name.

72.  Is the Defendant so estopped?

G.2.  Discussions on the law

73.  The parties have not been able to cite to me any direct authority determinative of the issue.  I therefore start from the basics.

74.  That “[there] is a general rule that a tenant is estopped from denying his or her landlord’s title, and a landlord from denying that of his or her tenant ” [46] is not in dispute.  Indeed, in Typhoon 8 Research Ltd v Seapower Resources International Ltd & Another [2002] 2 HKLRD 660, Le Pichon JA described it at §9 as “an ancient rule of common law”.

75.  In Cuthbertson v Irving 157 ER 1034, a mortgagor in possession (by the name of Biglands) leased certain premises to the defendant. The lease contained some covenants of repair.  While that lease was still subsisting, Biglands assigned his reversion to the plaintiff. The plaintiff subsequently sought to enforce those covenants.  The issue was whether the defendant could be allowed to dispute the title of Biglands (and hence that of the plaintiff who derived title from Biglands).  The Court of Exchequer said no.  Martin B, giving the judgment of the Court, observed that:

“ There are some points in the law relating to estoppels which seem clear. First, when a lessor without any legal estate or title demises to another, the parties themselves are estopped from disputing the validity of the lease on that ground; in other words a tenant cannot deny his landlord’s title, nor can the lessor dispute the validity of the lease. Secondly, where a lessor by deed grants a lease without title and subsequently acquires one, the estoppel is said to be fed, and the lease and reversion then take effect in interest and not by estoppel… (at p 1039)

…

… the following propositions may be laid down: — First, if any estate or interest passes from the lessor, or the real title is shewn upon the face of the lease, there is no estoppel at all.  Secondly, if the lessor have no title, and the lessee be evicted by him who has title paramount, the lessee can plead this and establish a defence to any action brought against him: Doe d. Higginbotham v. Barton (11 A. & E. 307); but, thirdly, so long as the lessee continues in possession under the lease, the law will not permit him to set up any defence founded upon the fact that the lessor ‘nil habuit in tenementis;’ and that upon the execution of the lease there is created in contemplation of law a reversion in fee simple by estoppel in the lessor, which passes by descent to his heir, and by purchase to an assignee or devisee.  A pleading test may be applied.  Had the plaintiff declared that Biglands was seised in fee and demised to the defendant and assigned his reversion to the plaintiff, the defendant could not effectually have traversed the assignment. Could he the seisin?  The plaintiff would have made a primâ facie case by shewing the lease to the defendant, and possession taken and enjoyed under it.  The defendant could not have shewn any other estate in Biglands.  He must therefore have said Biglands ‘nil habuit in tenementis.’  We are of opinion that the law will not permit him to do so …. (at p 1041)”

76.  Various rationales have been given for the existence and development of this “ancient rule of common law”:

(a)  In Cuthbertson v Irving, Martin B explained at p 1041 that:

“ This state of law in reality tends to maintain right and justice, and the enforcement of the contracts which men enter into with each other (one of the great objects of all law); for so long as a lessee enjoys everything which his lease purports to grant, how does it concern him what the title of the lessor, or the heir or assignee of his lessor, really is. All that is required of him is, that having received the full consideration for the contract he has entered into, he should on his part perform it….”

(b)  In Morton v Woods (1867-68) LR 3 QB 658, the foundation of the rule as explained Blackburn J is more agreement-based:

“ … if it is agreed that one shall be tenant to the other, both are estopped from disputing the other's title as landlord, and even though it be expressly stated that the landlord has no legal estate, still if they agree that the relation of landlord and tenant shall be created, and this agreement is carried out by the one being let into possession, as between them the relation of landlord and tenant is created, and they are just as much estopped as if there had been no such statement …” (at 670)

(c)  The explanations given by Mellor J, also in Morton v Woods, was similar to those given by Martin B in Cuthbertson v Irving, that:

“ … The real foundation of the estoppel is the fact of the one obtaining possession and enjoying the possession by the permission of the other. And so long as the one has this enjoyment, he is prevented by the rule of law from turning round and saying his landlord had no right or title to put him in possession. On the other hand, he is only estopped as long as the enjoyment continues, and if he be evicted by superior title, he is no longer estopped …”

(d)  In affirming the judgment of the Court of Queen’s Bench in Morton v Wood, Kelly CB in the Court of Exchequer Chamber [47] observed (at p 304) that:

“ … it is the creation of the tenancy, or the estoppel, which arises from the creation of the relation of landlord and tenant by agreement between the parties, that makes the actual legal estate unnecessary to support the distress…”

(e)  In Harrison v Wells [1967] 1 QB 263, Salmon LJ explained at p 277G that:

“ This rule of estoppel is founded, I think, on the well-known principle that you cannot approbate and reprobate. It is founded also on this consideration, that it would be unjust to allow the man who has taken full advantage of a lease to come forward and seek to evade his obligations under the lease by denying that the purported landlord was the landlord …”

 (f)  In Spencer Bower, The Law Relating to Estoppel by Representation 4^th ed., at IX.3.1, the justification appears to be more representation-based or acknowledgment-based, that:

“ Where by his acts with respect to demised land, a person represents to another that he acknowledges the other as his landlord, or as his tenant (as the case may be), or conducts himself in his dealings with the other in relation to the land in a manner which is consistent only with a recognition and assertion of the subsistence and validity of such a relation between them, he is estopped, as long as the acts and conduct continue, from denying that the other party had an estate or title sufficient to warrant the demise of the land …And other cases commend the rule for its convenience, policy, good sense and justice. ^{Footnote 4}

…

See Cooke v Loxley (1792) 5 Term Rep 4, per Lord Kenyon CJ at p 5 (‘It ought not to be permitted to a tenant who occupies land by a licence of another to call upon that other to show the title under which he let the land. This is not a mere technical rule, but is founded on public convenience and policy’) and per Grose J on the same page. Cf Parker v Manning (1798) 7 Term Rep 537 at p 539 and Alchorne v Gomme (1824) 2 Bing 54 at p 61. The rule can be justified on the basis that, historically, title to land in English law was relative, and not absolute.” (Footnote 4, emphasis added)

77.  When analyzing the scope of the rules governing tenancies by estoppel, one needs to be careful about the potentially misleading label of “tenancy by estoppel”.  In Bruton v London & Quadrant Housing Trust [2000] 1 AC 406, Lord Hoffmann in the House of Lords, in differing from the judgment of Millet LJ of the Court of Appeal, observed and explained at p 415H to 416F that:

“ …I think that Millett L.J. may have been misled by the ancient phrase ‘tenancy by estoppel’ into thinking that it described an agreement which would not otherwise be a lease or tenancy but which was treated as being one by virtue of an estoppel. In fact, as the authorities show, it is not the estoppel which creates the tenancy, but the tenancy which creates the estoppel. The estoppel arises when one or other of the parties wants to deny one of the ordinary incidents or obligations of the tenancy on the ground that the landlord had no legal estate. The basis of the estoppel is that having entered into an agreement which constitutes a lease or tenancy, he cannot repudiate that incident or obligation.”

Lord Hoffmann then cited Morton v Woods and the observations of Kelly CB quoted above and continued

“ Thus it is the fact that the agreement between the parties constitutes a tenancy that gives rise to an estoppel and not the other way round. It therefore seems to me that the question of tenancy by estoppel does not arise in this case. The issue is simply whether the agreement is a tenancy.”

78.  Hence, and I recapitulate, “it is not the estoppel which creates the tenancy, but the tenancy which creates the estoppel ”, and that an agreement which would not otherwise be a lease or tenancy cannot be treated as being one by virtue of an estoppel. 

79.  Lord Hoffmann’s elucidations of the rules are in my respectful view entirely consistent with how estoppel operates:

(a)  As explained by A.M. Prichard in Tenancy by Estoppel — The Problem and its Relevance (1964) 80 LQR 370, estoppel was developed against the “old pleading system”, that:

“ Estoppel can be understood only against the background of the old pleading system. Essentially estoppel operated to prevent the pleading of certain facts which might prove material. It differed thus radically from, say, the rules of admissibility of evidence: they operated at a different stage and would serve merely to make more difficult, or perhaps impossible, the proving of those facts, while estoppel operated to prevent one even starting to try to prove the facts. The purpose of the law in recognising estoppels was, initially at least, reasonable: in every case some element of policy would render it undesirable that a particular issue should be investigated; the law would consider itself justified in assuming the truth without any evidence being tendered …”

(b)  In Megarry and Wade, at §16-125, it is said that:

“ Estoppel is a principle of the law of evidence.”

(c)  Similarly, in Hill and Redman’s Law of Landlord and Tenant, it is said that at §A[46] that:

“ Estoppel is a principle of the law of evidence under which a person who has represented the truth of a certain fact is prevented from denying that the fact is true and is prevented from asserting the contrary of that fact. The form of estoppel which has its main effect in the law of evidence is an estoppel founded on a representation of fact, or common law estoppel. The representation may be by words, written or oral, or may arise as an inference from conduct. It is this form of estoppel which underlies the rules governing tenancies by estoppel. The parties to the transaction, by representing to each other that they stand in the relationship of landlord and tenant, the one by granting the lease and the other by accepting the lease and entering into possession are estopped from denying that relationship …”

(d)  It may also be noted that in Cuthbertson v Irving, Martin B did adopt a “pleading test”.  He explained that “the law will not permit him to set up any defence founded upon the fact that the lessor ‘nil habuit in tenementis;’ and that upon the execution of the lease there is created in contemplation of law a reversion in fee simple by estoppel in the lessor”.  This reversion in contemplation of law was referred to in Gray & Gray’s Elements of Land Law (5^th ed) at §4.2.64 as the “imaginary estate”.  The estoppel would only be “fed”, if ever fed, when the lessor who grants a lease without title subsequently acquires one;

(e)  Such being how estoppel operates, it would be extremely surprising if substantively an agreement which would not otherwise be a lease or tenancy could be transformed into one by virtue of an estoppel.

80.  I have considered the nature and bases of the rules governing tenancies by estoppel.  I state again that we are now concerned with the scenario in which a person who has entered into a tenancy agreement in his capacity as agent for a named landlord subsequently seeking to enforce the same personally as principal and landlord.  For myself, and in such a case, I see no basis for the rules to have developed, or be extended, so as to forbid a lessee from disputing the capacity and authority of such an agent:

(a)  Fundamentally, the lessee in the scenario which we are concerned with is not seeking to deny his landlord’s estate in the property or to dispute the sufficiency of the landlord’s title in the same.  What is being sought to be disputed is the contractual capacity and authority on the part of the agent, and the related issue of whether the agent is entitled to personally enforce the tenancy.  The subjects of the dispute are different in nature.  This is clearly different from those cases whether the rules on tenancy by estoppel have been held to be applicable;

(b)  There are in addition the following considerations;

(c)  The lessee in the scenario which we are concerned with has never acknowledged the agent as his landlord;

(d)  The lessee has also never made any representation that he acknowledges the agent as being his landlord;

(e)  The parties have not agreed that the lessee shall be the tenant of the agent, but only the tenant of the landlord who the agent has purportedly been authorized to act for;

(f)  Viewed from another angle, the lessee has never represented, acknowledged or agreed that the agent, albeit described as an agent, in fact signed and entered into the tenancy as principal and landlord;

(g)  “It is not the estoppel which creates the tenancy, but the tenancy which creates the estoppel”.  In the scenario which we are concerned with, there is no tenancy between the lessee and the agent personally as principal and landlord. Estoppel cannot create such a tenancy; and there is no such tenancy (one between the lessee and the agent personally as principal and landlord) which creates any estoppel;

(h)  In a case where the agent is subsequently seeking to enforce the tenancy agreement in his own name as principal and landlord, and in allowing the lessee to dispute the contractual capacity and authority of the agent, the lessee is not being allowed to approbate and reprobate (see §76(e) above).  The lessee has never represented, acknowledged or agreed that the agent was a principal or his landlord;

(i)  The consideration that title to land being relative but not absolute (see §76(f) above) is also irrelevant in the scenario that we are concerned with.  What the lessee is being asked to be permitted to challenge is not any title to land, but the contractual capacity and authority on the part of the agent to act for the landlord and to sue in his own name;

(j)  Is it not right, or not fair (see §76(a) above), to allow the lessee, having been allowed possession and enjoyment of the leased premises, to dispute the capacity and authority of the agent?  I do not believe so:

(i)  In a case where the rules of tenancy by estoppel apply, there is a tenancy between the parties.  Between them, one has agreed to be the tenant, and the other to be the lessor.  Once put in possession, whether the party who has agreed to be the landlord has sufficient title and estate to lease may be none of the lessee’s concern.  That tenancy creates an estoppel;

(ii)  But in the scenario which we are concerned with, the court is faced with a more fundamental issue — whether there is a legally enforceable tenancy agreement between the lessee and the agent, and related to that, whether the agent is legally entitled to enforce it.  The issue is no longer just the quality of any title which the lessor may or may not have.  It is a fundamental one which go to lessor’s right to sue, and the rights and liabilities between the parties;

(iii)  Further, if the concept of relativity of title is relevant [48], one notes immediately that an unauthorized and purported agent has nothing. In my view, it is neither wrong nor unjust for the law to allow a lessee in possession like the Defendant was to challenge the capacity of the agent;

 (iv)  So far, when discussing the Tenancy by Estoppel Issue in this Section, I have kept the Misrepresentation Issue separate so as not to complicate the matter.  If the consideration of the Misrepresentation Issue and my conclusions thereon are included in the discussion, this becomes an a fortiori case — it will clearly not be unjust for the law to permit a lessee to challenge the capacity of an agent who has made misrepresentation in respect of his capacity to sign the lease concerned.

81.  In his Closing [49], Mr Chan relies heavily on two cases, namely Commissioners of Public Works v Mackey [1941] IR 2017 and Lau Chiu v Ng Kam Chuen [1957] HKLR 552.  I will consider them in turn.

82.  Commissioners of Public Works v Mackey:

(a)  Mackey is not mentioned in Mr Chan’s Opening Submissions, but is only included in his Closing;

(b)  The case was decided by the Supreme Court of Ireland.  There, the Commissioners of Public Works in Ireland demised certain property to the defendant.  Subsequently, the defendant refused to move out.  The Commissioners brought actions for recovery of possession and mesne rates.  In defence, the defendant contended that constitutionally the Commissioners had no power to make any such letting, and that they had no estate in the lands which would support it, as the property belonged to or was vested in “the Irish Free State”, the Executive Council, or the Minister for Finance (and possibly others);

(c)  The Supreme Court of Ireland held that the defendant was not entitled to put those questions in issue;

(d)  However, the facts in Mackey are clearly different from what we have here.  In Mackey, the Commissioners of Public Works demised the premises concerned as principal and landlord.  They did not, like the Plaintiff in the present case and as I have found, demised the premises as agents for any named principal. Whether the property concerned belonged to or was vested in the Commissioners constitutionally raised altogether different issues;

(e)  Then Mr Chan refers to and relies heavily on the case of Ward v Ryan IR 10 CL 17 which FitzGibbon J in Mackey referred to.  Mr Chan in particular relies on the following observations by FitzGibbon J:

“ A tenant who has accepted possession under a lease, and has paid rent to the landlord who gave possession to him, cannot dispute the title of that landlord to recover possession at the expiration of the tenancy. Ward v. Ryan, a unanimous decision of a strong Court of Exchequer Chamber in this country, affirming a direction of Palles C.B. at the trial of an ejectment is conclusive against the defendant. In that case one, David Ryan , a mere agent with no title, let lands to the defendant by parol. He then by deed assigned the lands to the plaintiff, who demanded possession from the defendant, and brought an action of ejectment, founded upon the demand. The defendant relied upon the absence of any title in the plaintiff, who contended in answer that the defendant was estopped from questioning the title of the landlord from whom he had accepted possession and to whom he had paid rent.”

FitzGibbon J, having noted that the Court in Ward v Ryan ruled that the defendant was estopped, continued to observed that:

“ The decision is almost directly in point as regards its facts as well as its law. David Ryan, the lessor, was only a manager or agent, with no title in the lands, and his assignee, the plaintiff, was not even an agent of the true owner. It has been urged here as an objection to the title of the Commissioners of Public Works, that since the passing of the Constitution Act they are only a Department of State under the Minister for Finance, entrusted only with the management of the Shannon, and with no estate in or title to, and therefore without authority to make lettings of, the property in their charge. Even if that be so, their authority and their title to recover are certainly not less than those of the plaintiff in Ryan v Ward, and the ration decidendi of that case, which was only an affirmance of what had been unquestioned law for centuries, applies with even greater force to a letting by a statutory Corporation, a Department of the State, which is seeking to recover public property from a trespasser.” (All Mr Chan’s original emphasis)

 (f)  The facts of Ryan v Ward are not sufficiently recited in the Mackey.  Mr Chan has not included a copy of Ryan v Ward in his Closing.  Upon my request, he supplied one to me in the course of counsel’s oral closing submissions. While the facts remain not entirely clear from the judgment, it appears that David Ryan, described by FitzGibbon J as “a mere agent with no title”, in fact “was in possession for ten years” [50] and “let lands by parol to the Defendant for a term of two years” [51], and that there was an agreement between him and the Defendant.  As Whiteside CJ observed at p 20:

“ We think that the operation of the agreement between Daniel Ryan and the Defendant, had it been capable of taking effect, would have been to create a tenancy for two years between them, if the Defendant had entered under it. But that mutual agreement was not sufficient to pass an interest in law, and we have not courage to overrule the Statute of Frauds; we are of opinion that an estate at will only was thereby created, and being such, of course the owner of the estate was at liberty to determine that tenancy by a demand of possession. The Defendant having been put in by Daniel Ryan, he was estopped from denying that the man who put him in had any estate in the lands. The Defendant cannot set up any right to possession against Daniel Ryan, or the Plaintiff, his assignee by deed, without giving up possession…” (emphasis added)

It appears therefore that while David Ryan in Ryan v Ward might have been “a mere agent with no title”, he did not let the premises in that capacity for and on behalf of the true owner, like the Plaintiff in the present case did.  The facts in Ryan v Ward are different from those before me, and do not in any way support Mr Chan’s submissions on the Tenancy by Estoppel Issue. 

83.  Lau Chiu v Ng Kam Chuen:

(a)  In Lau Chiu, the respondent was the principal tenant of premises part of which he had allowed his younger brother to occupy as tenant at will.  The younger brother without the authority of the respondent let part of the premises occupied by him to the appellant.  The Court of Appeal accepted that the younger brother, as tenant at will, could not create in favour of the appellant a sub-tenancy that would be binding on the respondent.  However, if the appellant entered the premises in pursuance of a tenancy, good by estoppel against the younger brother, he did not enter the premises as a trespasser, and the respondent could not treat him as such until the respondent himself was entitled to immediate possession of that part of the premises occupied by the appellant.  As the respondent had failed to show that he had determined the tenancy at will between him and his younger brother first so that he had become entitled to the immediate possession of the premises, his action against the appellant failed;

(b)  Again, the facts in Lau Chiu are different.  There, as the Court of Appeal pointed out[52], “…the younger brother…claimed at all material times to be the principal tenant of the premises”.  He did not claim to let the part of the premises concerned to the appellant as agent for his elder brother, but did so purportedly as the principal tenant.  The fact that the tenancy between the appellant and the younger brother was good by estoppel against the younger brother does not assist the Defendant who entered into the 2012 TA as agent for Mr Chiong.

G.3.  Conclusion on the Tenancy by Estoppel Issue

84.  By reason of the above, I reject Mr Chan’s submissions.  I reject in particular the submission and proposition that the rules governing tenancies by estoppel operate on the facts of this case to the extent that the Defendant, as the Plaintiff avers in her Reply, is barred from disputing that the 2012 TA is valid and enforceable by the Plaintiff in her own name against the Defendant.

H.  Dismissal of the Plaintiff’s claim

85.  For the above reasons, I hold that:

(a)  the Plaintiff did not intend to, and did not sign the 2012 TA personally as principal and landlord. Nor was that the intention of the Defendant;

(b)  the Plaintiff as a result cannot enforce the 2012 TA in her own name as principal and landlord;

(c)  the Plaintiff on the face of the 2012 TA made the said Misrepresentations in relation to her capacity, that she was agent of Mr Chiong with respect to the leasing of Portion B, and that she signed the 2012 TA as such.  Those representations were to the Plaintiff’s knowledge false, which the Defendant relied on and was induced thereby to enter into the 2012 TA;

(d)  the relief of rescission remains open to the Defendant, and he is entitled to have it rescinded;

(e)  the rules governing tenancies by estoppel do not operate on the facts of this case so as to bar the Defendant from disputing the validity of the 2012 TA or its enforceability by the Plaintiff in her own name against the Defendant.

86.  I dismiss the Plaintiff’s claim in its entirety. 

I.  The Counterclaim

I.1. The Misrepresentation Issue

87.  I have in effect dealt with the Defendant’s counterclaim based on the said Misrepresentations.

88.  I have also expressed my view that the relief of rescission remains open to the Defendant, and he is entitled to have it rescinded.  I so order. 

89.  Consequentially, I further order return by the Plaintiff to the Defendant the rental deposit in the sum of HK$51,000 and the rent for January 2012 in the sum of HK$25,500.

I.2. The breach of warranty of authority issue

90.  This is a short point.  I accept Mr Dawes’s submissions[53] that if the court is not convinced that the Plaintiff contracted as a principal in respect of 2012 TA (and I am not), then on the Plaintiff’s own case she was not an agent of Mr Chiong; it must follow that her warranty, by way of the said Misrepresentations, were false, and there is thus a breach of warranty of authority.

91.  Mr Dawes accepts that the Defendant has not suffered any loss or damage on top of those arising from the part of the counterclaim based on the said Misrepresentations.  This is particularly so given my order for return of the rental deposit and the rent for the month of January 2012.  I therefore award no damages in respect of the Plaintiff’s breach of warranty.

J.  Overall disposition

92.  I dismiss the Plaintiff’s claim in its entirety.

93.  In respect of the Defendant’s counterclaim:

(a)  I make a Declaration that the Defendant is entitled to rescind the 2012 TA (§2 of the Prayer)

(b)  I made a further Declaration that the Plaintiff cannot enforce the 2012 TA in her own name as principal and landlord (§3 of the Prayer);

(c)  I make an Order for the return of the rental deposit in the sum of HK$51,000 and the rent for January 2012 in the sum of HK$25,500 (§4 of the Prayer);

(d)  There be an order nisi for interest on the sums at (c) above at 1% over HSBC best lending rate from 1 February 2012 to the date of judgment and thereafter at the judgment rate; and

(e)  There be an order nisi that the Plaintiff shall pay the Defendant the costs of these proceedings, to be taxed if not agreed.  I am not satisfied that this is an appropriate case to grant a certificate for two counsel.

K.  Referral of this judgment to the Official Administrator

94.  Mr Chiong has passed away.  The Plaintiff is not the administratrix of his estate.  She has no capacity to claim back possession of Shop D.  She has also said that “Father … told me that Mr. Chiong was not married with no issue.  He was not close with his siblings and family members.”  I doubt therefore whether Mr Chiong’s estate has been taken care of.   On the other hand, I do not deem it appropriate to in effect allow the Defendant and his sons to continue to occupy Portion B indefinitely.  Having invited submissions, I have decided to refer this Judgment to the Official Administrator for him to decide whether any steps may be taken under the Probate and Administration Ordinance.