MING HSING DEVELOPMENT CO. LTD. v. MING SHIU CHUNG

HCA671/1995

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NOS.671 AND 672 OF 1995

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J U D G M E N T

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1. In both those actions, the plaintiff claims against the defendants for licence fee and mesne profits for occupying the property at Flat E, 25/F, Excelsior Court, 83 Robinson Road, Hong Kong ("the Property"). The two actions were ordered to be tried together by the order of Yeung J on 10 May 2000.

BACKGROUND

2. The plaintiff is a company incorporated on 27 June 1972. Until 1992, the shares in the plaintiff were held by Mr Ming John Fook ("Father") and Madam Leung Lai Ha ("Mother"), who were husband and wife. Father died on 21 December 1992, pre-deceased by Mother. They were survived by their seven children, namely :

(1) Ming Shiu Chung ("Shiu Chung");

(2) Ming Shiu Sum ("Lawrence");

(3) Ming Shiu Tong ("Shiu Tong");

(4) Ming Shiu Wah ("Kenneth");

(5) Ming Shiu Hung ("Ronald");

(6) Ming Shiu Kuen ("Bertha"); and

(7) Ming Shiu Kow ("Alex").

Shiu Tong is the defendant in HCA671/1995 and Shiu Chung is the defendant in HCA672/1995.

3. Shortly before his death on 3 November 1992, Father transferred his shares in the plaintiff to a JF Ming Inc. A further 10,000 shares were allotted to JF Ming Inc. Consequently, JF Ming Inc. holds 7/8th of the shares in the plaintiff with the remaining 1/8th being registered in Mother's name.

4. JF Ming Inc. is a BVI company of which all the seven children are shareholders.

5. Until Father's death, Father and his brother, Ming Ka Fook and Lawrence were the directors of the plaintiff. In 1993, the directors were Lawrence and a Lai Sum Land Investment Co. Ltd, a company in which JF Ming Inc. and Lawrence each held one share. On 26 January 1994, Kenneth was appointed as a director of the plaintiff. Kenneth died on 11 November 1998.

6. The plaintiff acquired the Property on 19 May 1990. The Property was occupied by Father as his residence. It is the plaintiff's case that Lawrence also lived there with his son. Lawrence said he moved out of the Property after Father fell ill and was hospitalized.

7. It is common ground that after Father's death, the siblings agreed at a meeting held on 30 April 1993 to sell the Property by auction. Solicitors were instructed to proceed with the auction. The auction was however called off and notice of cancellation was given by the solicitors on 19 May 1993.

THE ACTIONS

8. On 20 January 1995, the plaintiff commenced these actions against Shiu Tong and Shiu Chung. The claims were initially for possession of the Property together with licence fee and mesne profits for occupation of the Property. After the plaintiff obtained possession of the Property in March 1995, the Statements of Claim were amended in May 1995 to delete the claim for possession.

9. Shiu Tong and Shiu Chung disputed the claims and filed their Defences on 19 May 1995. Default judgment were entered on 1 July 1996 on account of their failure to file the lists of documents. The judgments were subsequently set aside by consent on condition that they provide bank guarantees to cover the plaintiff's claims, which was later varied. Instead of providing bank guarantees, Shiu Tong and Shiu Chung each paid into court $650,000. These sums are still standing in court.

10. The Defences were amended at the trial shortly before the defence case began. I shall return to deal with this in the latter part of this judgment.

11. The plaintiff's case is that Lawrence had on behalf of the plaintiff orally granted to Shiu Tong and Shiu Chung a licence to occupy the Property upon the terms and conditions as set out in or evidenced by a Chinese memorandum written out by Shiu Chung ("the Chinese Memorandum"). Under the Chinese Memorandum, each of the siblings is entitled to occupy the Property without fee up to four weeks in every six months' period, and for any occupation in excess of the four weeks' period, a fee of $800 per day was payable. The plaintiff says that since about 1 May 1993, Shiu Chung and Shiu Tong had been in occupation of the Property until 29 March 1995. The plaintiff also says that through a letter sent by its solicitors herein ("HWG"), the licence had been terminated by notice given on 11 January 1995 a licence to take effect on 19 January 1995. The plaintiff therefore claims a fee for occupation of the Property from 1 May 1993 to 19 January 1995 and mesne profits from 20 January 1995 to 29 March 1995, both at $800 per day.

12. In their Defences filed on 19 May1995, Shiu Chung and Shiu Tong deny the oral licence and plead that their occupation of the Property is pursuant to a licence granted by Father on behalf of the plaintiff. They also dispute the periods of their occupation of the Property. By their Amended Defence, Shiu Chung and Shiu Tong further say that if indeed there was an oral agreement granting them a licence to occupy the Property on the terms set out in the Chinese Memorandum, the plaintiff was not a party to such agreement. This amendment was introduced at the close of the plaintiff's case. It was allowed in despite objections from the plaintiff. Principally, I consider the amendment to be relevant and, although sought late, does not occasion prejudice to the plaintiff that cannot be met by an order for costs and a short adjournment.

13. Consequent upon the amendment, the plaintiff amended its Reply to plead that the terms in the Chinese Memorandum reflected the understanding or undertaking or agreement of the family members that anyone occupying the Property would observe the terms set out therein, including the payment of fee for occupation in excess of the free period. The plaintiff pleads further that on the basis of such understanding, undertaking or agreement, the plaintiff as the owner is entitled to collect the fee for occupation.

14. The amendment to the Reply is in fact the subject matter of the plaintiff's applications to further amend the Re-Re-Amended Statement of Claim in both actions, which was opposed by the defendants and dismissed by Deputy Judge Gill on 22 January 2002. The plaintiff has appealed against the order and the appeals are pending. The plaintiff is however contented for the trial to proceed in the meantime. It may well be that given the latest amendments to the pleadings, the appeals have become academic.

THE ISSUES

15. The issues in each of the two actions can be summarized as follows :

(1) Whether there was any final agreement for the occupation of the Property on the terms and conditions set out in the Chinese Memorandum, in particular, that a fee of $800 per day is payable for occupation in excess of four weeks in every six months' period;

(2) If there was such final agreement, whether the plaintiff is entitled to enforce it and/or to demand and collect the occupation fee; and

(3) If either or both of the defendants are liable to pay occupation fee to the plaintiff, what is the amount payable.

16. These are primarily issues of fact, the resolution of which largely hinges on the credibility and reliability of the witnesses called and their evidence.

THE WITNESSES AND THE EVIDENCE

17. The plaintiff called two witnesses, Lawrence and Mr Paul Carolan, formerly a solicitor working with Messrs Baker & McKenzie ("BM").

18. Lawrence is currently the only personal director of the plaintiff; the other director being a corporation. Lawrence's evidence is that the plaintiff purchased the Property for the purpose of providing a residence for Father. At the request of Father, he also lived in the Property to keep Father company. After Father was hospitalized, he moved out of the Property. When cross-examined, Lawrence said he was not aware that Father had given Shiu Tong or Shiu Chung the keys of the Property.

19. According to Lawrence, after the death of Father, there were various discussions among the siblings on what to do with the Property. After the auction of the Property was cancelled, there were further discussions on the use and enjoyment of the Property. At that time, Alex was planning to return to Hong Kong from the USA to practise medicine. Shiu Chung was worried that he might occupy the whole of the Property and was concerned that something should be done to prevent this from happening. This was raised during one of the gatherings of the siblings. Lawrence said that this was probably the dinner meeting at North Sea Fishing Village Restaurant in May 1993 ("the May 1993 Meeting"), at which both Shiu Chung and Shiu Tong were present. On that occasion, Shiu Chung proposed to set out the terms for the use of the Property by the siblings. He further proposed some of the terms, including the daily rate of $800 for any occupation in excess of four weeks in every six months. The terms now contained in the Chinese Memorandum were discussed and no one indicated objection to it. Lawrence explained that he agreed to the terms, though he was aware that the siblings were not the shareholders of the plaintiff, because he considered that they were all family members. Lawrence further said that Shiu Chung made a note of the terms agreed on that occasion and further volunteered to write out the terms. Subsequent to the meeting, Shiu Chung made out the Chinese Memorandum, a copy of which was given to Lawrence while another copy was posted up on the door of the refrigerator on the Property.

20. According to Lawrence, it was the clear understanding of the siblings at the May 1993 Meeting that they had to observe the terms in the Chinese Memorandum when occupying the Property. He agreed that no express reference was made to the plaintiff, but he said it was known to all that the Property was owned by the plaintiff.

21. It is Lawrence's evidence that he had given Shiu Chung a set of the keys of the Property, but Shiu Chung never returned them. He said that Shiu Chung and Shiu Tong made the most use of the Property. He had made telephone calls to the Property in an attempt to request Shiu Tong to pay for the telephone and utility charges and the occupation fee, but he refused to speak to him. Lawrence did not agree with the suggestion that it was extraordinary behaviour to ask his brothers to pay for the occupation of the Property. He was rather open about the fact that he was not on good terms with his brothers, a matter that is evident from the facts of this case.

22. Lawrence referred to a letter dated 26 February 1994 from BM, in which the plaintiff demanded the defendants to deliver possession of the Property. Lawrence said that after this letter was sent, Kenneth went to the Property on 7 March 1994 and tried to gain entry to it. In a draft statement prepared for Kenneth, who has since died, ("Kenneth's Statement") and annexed to Lawrence's Amended Witness Statement, Kenneth said he tried to open the lock with the key but it did not work, so he called in a locksmith. When they were trying to break open the lock, police came and arrested him and two staff of the plaintiff who were with him. Kenneth had to be bailed out, but eventually no prosecution was brought. After these actions were commenced, the plaintiff through HWG broke open the lock and took possession of the Property on 29 March 1995.

23. Mr Paul Carolan, who was then a partner in the litigation department of BM, gave evidence confirming that on 7 March 1994, he went to Hollywood Police Station to see Kenneth and two other employees of the plaintiff, who were in police custody. According to him, the plaintiff and Lawrence were then the clients of the conveyancing department of BM. Mr Carolan was accompanied by Lawrence on the police visit, but he was alone with Kenneth and the two employees during the interview. Kenneth told him that he had rung the door bell a number of times, but no one answered the door. He then tried the key and found it did not work. So he telephoned the locksmith to come so as to gain entry to the Property. When the locksmith was working, police came, as a result of a report received, and arrested Kenneth and the two employees. Based on what Kenneth told him, Mr Carolan prepared Kenneth's Statement, which Kenneth had verbally confirmed to him to be accurate. In cross-examination, Mr Carolan explained that when he put down in Kenneth's statement that the key did not work, he meant that Kenneth had tried to open the lock by key but without success, and Kenneth concluded that the lock had been changed. He recalled Kenneth did tell him that the lock had been changed.

24. Both Shiu Tong and Shiu Chung had been called to testify for the defence. In the case of Shiu Tong, after being cross-examined for a little over one day, he did not return to the court. An application was made by his counsel, Mr Pang, for him to be excused from further cross-examination. It was put on the basis that serious harm to his health may result if he were to continue with his evidence. Initially, a report from a Dr Chan Chung Mau, a psychiatrist in private practice, was submitted in connection with the application. Mr Pang fairly accepted that Dr Chan's report in no way supports the suggestion that serious harm to his health may follow if Shiu Tong were to continue with his evidence. While the report refers to the memory and language ability and the psychiatric condition of Shiu Tong, it is irrelevant to the application made. On my invitation, Mr Pang agreed to and did withdraw Dr Chan's report.

25. In response to the application, Mr Mok asked that Shiu Tong's evidence-in-chief be expunged from the court record, a course that Mr Pang did not seek to oppose. Indeed this is an appropriate course given that the plaintiff had not been afforded a full opportunity to cross-examine the witness. The evidence-in-chief of Shiu Tong is accordingly expunged from the court record.

26. Mr Mok further asked the court to act on the admissions made by Shiu Tong under cross-examination and in his affirmation made on 28 February 1995. Mr Mok also referred to Gibbs v. Rea [1998] AC 786 and invited the court to draw inference adverse to Shiu Tong from his failure or refusal to continue with the cross-examination.

27. In Gibbs v. Rea, the majority of the Judicial Committee of the Privy Council observed that (at 795H-799A) :

" It was of course open to the defendants to elect to give no evidence and simply contend that the case against them was not proved. But that course carried with it the risk that should it transpire there was some evidence tending to establish the plaintiff's case, albeit slender evidence, their silence in circumstances in which they would be expected to answer might convert that evidence into proof: ..."

28. In Halford v. Brookes Lexis transcript 30.9.91, Rougier J also observed that there is no right to silence in civil actions, so that the court is entitled to have regard to a defendant's failure to give evidence, not by any means as being conclusive but as having a degree of probative value. I am in agreement with this view.

29. In this case, I have considerable reservations as to the real reasons behind Shiu Tong's decision not to return to the witness box to be further cross-examined. By the time this decision was taken, Shiu Tong had evidently been discredited under cross-examination in several aspects of the case, including the May 1993 Meeting, the circumstances leading to the making of the Chinese Memorandum as well as the events on 7 March 1994. The answers he gave also contradict the defence case as pleaded and as stated in his and Shiu Chung's witness statements. The assertion that it is due to health consideration that he did not wish to continue to be cross-examined is doubtful. It is not supported by any medical opinion. There is also no explanation why a private psychiatrist was consulted and why no medical report from Pamela Youde Hospital was available, when it was intimated that Shiu Chung consulted this hospital for his heart condition.

30. In my view, this is a case in which the court, in assessing the credibility of the evidence and the parties' case, is entitled to take into consideration the failure of Shiu Tong to continue to be cross-examined and also the statements he had made under cross-examination and in his early affirmation that are supportive of the plaintiff's case.

31. As for Shiu Chung, he gave evidence that he had been given a set of keys to the Property by Father so that he could stay in the Property when he visited Hong Kong form the USA. He stated that he had stayed in the Property during various periods, but he cannot now be sure as to the precise dates and durations. He accepted that the Chinese Memorandum was written by him, but he said that it was prepared for a meeting held on 28 January 1994. Shiu Tong said that the terms contained in the Chinese Memorandum had not been agreed among the siblings because there was no opportunity to do so at the 28 January 1994 Meeting. He did not post a copy of it on the door of the refrigerator at the Property and he did not see a copy of it being so posted up.

32. Shiu Chung was extensively cross-examined as to the circumstances leading to the preparation of the Chinese Memorandum. After much prevarication, he accepted that he had expressed concern over the possibility of the Property being used in a manner that would not be fair to all the siblings. He claimed that other siblings had also raised similar concern. He denied that his concern was directed at Alex's intended return to Hong Kong to practise medicine. He disagreed that the issue of fair use of the Property and the terms set out in the Chinese Memorandum had been discussed among the siblings. According to him, these matters were only mentioned or talked about casually and the siblings were just throwing proposals or ideas. Shiu Chung admitted that at the May 1993 Meeting when the matters were being talked about, he had made a note of what were said. Again after much prevarication, Shiu Chung agreed that the notes he made at the May 1993 Meeting was in substance no different from the Chinese Memorandum and that the Chinese Memorandum was based upon his notes.

33. As to the events leading to Kenneth's arrest, Shiu Chung agreed that he was informed of BM's letter dated 26 February 1994 demanding delivery of possession of the Property. His evidence is that a few days before 7 March 1994, Kenneth had also telephoned and said he would come to change the lock(s) to the Property so that Shiu Chung and Shiu Tong would not be able to return to it. Then on 7 March when he and Shiu Tong and their wives were present in the Property, there were drilling noises coming from outside the Property. Prior to this, he did not hear the door bell ring. A report was then made to the police and arrests were made after police came. Shiu Tong said he did not know who was outside and he was not aware that Kenneth was arrested by the police until he went to the police station to give statement, shortly after the incident. According to him, the situation was very chaotic and the wives were screaming, and he did not have an opportunity to find out who was outside the door even when the police came and the door was opened. He denied that the locks to the Property had been changed. He also denied that the changing of the lock and the report to police were attempts by him and Shiu Tong to resist the plaintiff's demand for possession of the Property.

THE CREDIBILITY AND RELIABILITY OF THE WITNESSES

34. Having regard to the evidence and the demeanour of Lawrence and Shiu Chung, I have no doubt that Lawrence's evidence is to be preferred to that of Shiu Chung. Not only is Shiu Chung evasive, but he is also self-contradictory on many occasions.

35. In his first witness statement dated 19 July 2000, he said in paragraph 12 that it was felt by the children that the use of the Property was not of equal benefit to all and "various discussions between various family members took place at different times". Yet when he was asked by the plaintiff's counsel, Mr Mok, whether he was concerned about the unequal use of the Property, he refused to directly answer the question. He repeatedly stated that everyone was concerned and that it does not mean that he was concerned. Despite his evidence that this was a common concern and despite his reference in the witness statement to various discussions among the siblings at different times, Shiu Chung claimed that the concern was first raised at the May 1993 Meeting, and that that was the only occasion when the matter was mentioned. He was adamant that there was never any discussion of the matter. He even suggested that Mr Mok was forcing the term "discussion" on him, when he himself had employed the term in his witness statement and in his affirmation.

36. In an earlier affirmation made on 28 February 1995, Shiu Chung referred to the Chinese Memorandum and said that it was a document which was "discussed" among the brothers and sister and himself, but it was not finally agreed to. Shiu Tong said the same thing in his affirmation made also on 28 February 1995. This is in stark contradiction to the oral testimony of Shiu Chung and the case presented in his witness statements, namely, the contents in the Chinese Memorandum were not discussed among the siblings.

37. I pause here to observe that it is only in his cross-examination that Shiu Chung admitted and stated for the first time that he had made a contemporaneous note of the discussions at the May 1993 Meeting, which he subsequently reduced into the Chinese Memorandum. The impression Shiu Chung gave in his witness statements is that at the May 1993 Meeting, proposals and ideas about regulating the use of the Property were put forward and that when he returned to Hong Kong in early 1994 for the 28 January 1994 Meeting, he drafted the Chinese Memorandum to facilitate discussions at the forthcoming meeting. I shall return to this omission and its significance later.

38. In my view, the account given by Shiu Chung is inherently incredible. If there were merely causal chats at the May 1993 Meeting and that he did not take the exchanges seriously, it would not have been necessary for him to make notes of what had been said. And if the siblings were only throwing ideas and no consensus was reached, then Shiu Chung should have recorded all the different proposals put forward at the May 1993 Meeting. Shiu Chung said that due to long lapse of time, he could not now recall whether there were other things in his notes that were not reflected in the Chinese Memorandum. But that is immaterial. If his notes had recorded other ideas or proposals not set out in the Chinese Memorandum, there is no explanation as to how he came to pick only the terms now contained in the Chinese Memorandum. The only probable and logical reason is that the terms contained in the Chinese Memorandum were the terms agreed upon by the siblings.

39. Both Mr Pang and Shiu Chung had placed great emphasis on the fact that the Chinese Memorandum was not signed by the siblings. I accept that on previous occasions when they agreed to the liquidation of the plaintiff and to auction the Property, the siblings had signed on the notes recording the agreements. That, however, is only a piece of circumstantial material to be taken into account in deciding whether the defendants agreed to the terms set out in the Memorandum. Quite apart from the fact that the siblings' subsequent decision to withhold the liquidation of the plaintiff was not reduced into writing and signed, it is important to note the nature of the Chinese Memorandum and the language in which it is couched.

40. The Chinese Memorandum takes the format of a notice or circular to all siblings on the terms and conditions for the use and occupation of the Property. This is consistent with Lawrence's account on the circumstances leading to the making of the Chinese Memorandum, namely, out of concern for the fair and equal use of the Property, terms to regulate the use were discussed and agreed upon by the siblings and Shiu Chung then volunteered to write out the agreed terms. The Chinese Memorandum would not be couched in such language had it been prepared for the purpose of discussions, as alleged by Shiu Chung. This is particularly so having regard to the fact that Shiu Chung had made notes of the May 1993 Meeting. There is plainly no need to write another document, let alone a document in such format and language, if it was just for further discussions at the meeting on 28 January 1994. Shiu Chung had not explained why the notes he took at the May 1993 Meeting could not be used for further discussions. In this regard, Shiu Chung's omission to mention in his witness statements that the Chinese Memorandum was based on the notes he took at the May 1993 Meeting would appear to be more than an accidental slip. I do not consider the fact that the Chinese Memorandum was not signed lends credence to the defendants' case that there was no agreement on the terms contained therein. I also do not consider the absence of Bertha at the May 1993 Meeting supports the defendants' case that the Chinese Memorandum was only a draft. The absence of Bertha has no effect on whether the brothers present at the May 1993 Meeting had agreed to the terms. Afterall it is common ground that Bertha rarely returned to Hong Kong.

41. Mr Pang also relied heavily on two solicitors' letters issued on behalf of the plaintiff. The first is BM's letter dated 26 February 1994 and the second is HWG's letter dated 10 January 1995. In BM's letter, it stated that the defendants and other siblings had since about January 1994 been occupying the Property without consent or agreement. It made no reference to any licence or revocation of licence. As to HWG's letter, it stated that the licence was granted on about 28 January 1994 by the plaintiff to the defendants for the occupation of the Property. Mr Pang submitted that these letters contradict the plaintiff's case that there was an agreement granting a licence, while supporting Shiu Chung's evidence that the Chinese Memorandum was only given to Lawrence on 28 January 1994.

42. It is true that the contents of the two letters do not reflect the basis of the plaintiff's claim. It is also fair to say that Lawrence had not given very satisfactory explanations on these letters under cross-examination. But when considering these letters for the purpose of assessing the credibility of the witnesses and their evidence, it is to be remembered that BM's letter was written shortly after the meeting on 28 January 1994 and within days after the sublings' resolution to remove Lawrence as director of JF Ming Inc. The meeting on 28 January 1994 is a high watermark in the relationship of the siblings. It is not disputed that as a result of this meeting, their relationship turned critically bad, so much so that on 21 February 1994, the other siblings, save Kenneth, passed a resolution removing Lawrence as a director. Five days later, BM's letter was issued. Given the timing, it is not improbable that the letter was written without a great deal of consideration or careful analysis of the facts and legal position. The silence of the letter on a licence is not that surprising. As to HWG's letter and when a copy of the Chinese Memorandum was given to Lawrence, for reasons given below, I agree that Lawrence's recollection that he received it from Shiu Chung a few days after the May 1993 Meeting is probably wrong. But looking at the evidence as a whole, I do not agree that this demonstrates Lawrence to be untruthful and unreliable in other aspects of his evidence.

43. On the other hand, Shiu Chung was most disingenuous when he was cross-examined about the arrest of Kenneth. It is difficult to believe that he did not try to find out who was outside the Property and causing the drilling noises. With the knowledge of BM's letter dated 26 February 1994 and of Kenneth's telephone call made just a few days before, it is hard to accept Shiu Chung's evidence that it did not occur to him that it could have been Kenneth trying to break open the door. It is equally unbelievable that he would not try to establish the identity of the person(s) outside the Property. It is even more incredible that after they had opened the door for the police he still did not know it was his brother. It is only natural that the police officers would make enquiries with the occupants of the Property before deciding to take Kenneth into police custody. It cannot be that Shiu Chung did not know that it was Kenneth who was trying to break open the door, until after he had gone to the police station.

44. By insisting that he was not aware of Kenneth's presence and arrest until he went to the police station, Shiu Chung is, in my view, putting up excuses to justify his and Shiu Tong's actions that led to Kenneth's arrest. Admittedly, despite BM's letter, Shiu Tong and Shiu Chung had no intention of complying with the plaintiff's demand to vacate the Property. I have no doubt that the lock of the gate to the Property had been changed. There is no conceivable reason for Kenneth to call in a locksmith and to resort to breaking open the lock if he could open the gate with the keys he had. The only people who would want to change the lock were Shiu Tong and Shiu Chung. As Mr Mok suggested, the change of the lock and the report made to the police were tactical moves to combat the plaintiff's demand to recover possession of the Property. The letter dated 7 March 1994 from the defendants' solicitors herein warning against further attempt to enter the Property amplifies this intention.

45. The acts of reporting Kenneth to the police and allowing him to be taken into custody, however, are hardly compatible with their contention that the Property is a family home which all siblings are entitled to access and enjoy. It is also extraordinary behaviour for a person to report his brother's attempt to enter the family home to the police and to be contented for the brother to be taken into custody for that. Clearly both Shiu Chung and Shiu Tong are aware of the unreasonableness of their actions. This accounts for their evasive and defensive answers when being questioned on this matter. It also explains why they both claimed to have no knowledge of Kenneth's presence until all of them were in the police station. At the same time, this episode of events also exemplifies the animosity between the defendants on the one hand and Lawrence and/or Kenneth on the other.

46. For the reasons given above, I do not consider Shiu Chung a credible witness. I also do not find his evidence truthful. I do not accept his account that the Chinese Memorandum was written for discussions at the meeting on 28 January 1994. I reject, too, his assertion that the terms embodied in the Chinese Memorandum were never formally discussed or agreed upon.

47. I find as a fact that the contents of the Chinese Memorandum had been discussed at the May 1993 Meeting and agreed to by the brothers present, including Shiu Tong and Shiu Chung. As admitted, Shiu Chung made a note of these agreed terms. I also find that Shiu Chung had read out the terms. Subsequently, Shiu Chung reduced his notes into the Chinese Memorandum and gave a copy to Lawrence. A copy of it was also posted on the door of the refrigerator in the Property. I accept Lawrence's evidence that he had handed a set of keys to the Property to Shiu Chung. Although it is possible that the siblings had previously been provided with keys by Father, it is not improbable for Lawrence to give Shiu Chung a set of keys to the Property, having regard to the terms that required occupants of the Property to notify Lawrence in advance and to return the keys to Lawrence at the end of the occupation. The return of keys was intended to be one of the regulatory measures.

48. As to when Shiu Chung handed a copy of the Chinese Memorandum to Lawrence and when the keys were given to Shiu Chung, I am of the view that Lawrence had probably made a mistake. Considering that the May 1993 Meeting happened at about end of May 1993 and that Shiu Chung left Hong Kong on 30 May 1993, it is unlikely that it took place a few days after the May 1993 Meeting. It is probable that this took place after Shiu Chung returned to Hong Kong in January 1994.

AGREEMENT GRANTING A LICENCE TO OCCUPY THE PROPERTY?

49. It follows from my findings on the fact that each of the defendants had agreed to the terms as appeared in the Chinese Memorandum, including the payment of a daily fee of $800 for occupation in excess of four weeks in every six months' period. I have also observed that the issue of whether there is a binding agreement between the plaintiff and the defendants on the terms appearing in the Chinese Memorandum is unaffected by Bertha's absence at the May 1993 Meeting. It is not the plaintiff's pleaded case that the agreement was one among all siblings.

50. On the issue of whether the plaintiff was a party to the agreement, I accept that the Chinese Memorandum makes no reference to the plaintiff at all. Shiu Chung's evidence is that the legal ownership of the Property and the capacity of Lawrence were not considered at all. Lawrence accepted, too, that no express references were made to the plaintiff during the May 1993 Meeting.

51. Notwithstanding all these, it is not in dispute that at the May 1993 Meeting, all the brothers were aware that the Property was owned by the plaintiff and Lawrence was the only personal director of the plaintiff. That being the case, the person to enforce the agreement and to receive the payment for occupying the Property must be the plaintiff acting through Lawrence. The brothers, in agreeing that they would return the keys to Lawrence and notify Lawrence of their use of the Property, clearly recognized and acknowledged this. The only and irresistible inference is that it was the understanding of the brothers, including Shiu Tong and Shiu Chung, that Lawrence entered into the agreement both in his personal capacity and in his capacity as director of the plaintiff.

52. For my part, I have no doubt that there was an oral agreement between the plaintiff and the brothers, including the defendants, for the use and occupation of the Property on the terms and conditions as appeared by the Chinese Memorandum.

53. The effect of the agreement was to give the defendants and the other brothers an authority to use the Property. It amounts to a contractual licence to occupy the Property. This oral agreement will supersede any licence granted by Father to the sublings as alleged by the defendants.

54. Although a fee was to be paid for occupation beyond four weeks in every period of six months, the licence is by its nature a gratuitous one in that no fee was payable unless and until the occupation exceeded four weeks in every six months. The payment of a fee was to discourage excessive use of the Property and not as a consideration for occupying the Property.

REVOCATION OF THE LICENCE

55. Whether it is a gratuitous licence or a licence at value, it is revocable and can be determined by the giving of reasonable notice. In this regard, BM's letter dated 26 February 1994 would not qualify as an effective revocation of the licence in that it only gave two days' notice for the vacation of the Property. It is hardly sufficient time for any licencee to make practical arrangements for removal.

56. Mr Mok had submitted that the defendants should have realized from BM's letter dated 26 February 1994 that they could no longer stay in the Property without payment of a fee. I am unable to agree that the letter can save as a notice revocating the gratuitous licence previously granted and putting in its place a licence for value. Quite apart from the fact that the length of notice is unreasonably short, the letter does not state that as from 28 February 1994 the defendants and/or the brothers had to pay a licence fee for the use of the Property. On the contrary, the letter demands the defendants to deliver up possession of the Property.

57. In my view, the licence granted by the plaintiff only came to be terminated by HWG's letter dated 11 January 1995, which gave notice to terminate the licence on 19 January 1995. That is also the plaintiff's pleaded case. The termination therefore took effect on 19 January 1995 as stipulated in the letter.

QUANTUM

(1) Up to 19 January 1995

58. The defendants' use of the Property prior to 19 January 1995 falls to be governed by the terms of the gratuitous licence, as contained or evidenced by the Chinese Memorandum. Each of the defendants is liable to pay $800 for each day of occupation in excess of four weeks in every six months' period.

59. In the case of Shiu Tong, the first occasion he returned to Hong Kong after the May 1993 Meeting was on 26 October 1993. The periods of his stay in Hong Kong between 26 October 1993 and 19 January 1995 are as follows :

26 October 1993 to 16 March 1994

14 July 1994 to 7 September 1994

18 September 1994 to 20 December 1994

60. Although Shiu Tong had pleaded in the Amended Defence that he only occupied the Property for part of the periods in Hong Kong, there is no evidence in support of this contention.

61. As for Shiu Chung, the periods of his stay in Hong Kong after the May 1993 Meeting and 19 January 1995 are as follows :

21 January 1994 to 15 March 1994

22 April 1994 to 31 May 1994

3 September 1994 to 7 December 1994

62. Again, Shiu Chung had pleaded that he only occupied the Property for a small part of his stay in Hong Kong. Although he had confirmed this part of his pleaded case in his affirmation filed in 1995, Shiu Chung had stated repeatedly in his testimony that he could not be sure as to its accuracy. Indeed the telephone bills of the Property shows that IDD calls were made to Shiu Chung's home in USA on dates that he was in Hong Kong but which he claimed he did not occupy the Property. Shiu Chung had tried to explain that the calls could have been made by others, a suggestion that I am unable to accept. The burden is on Shiu Chung to make good his case that he did not stay in the Property for the entire periods he was in Hong Kong. Given the state of the evidence, the only conclusion is that he fails to discharge the burden.

63. Mr Mok had submitted that the defendants are liable to pay the $800 daily licence fee for the full period after 7 March 1994 on the basis that they had excluded the plaintiff from the Property. I have already found on a balance of probabilities that the defendants were responsible for the change of the lock of the Property, which occurred on 7 March 1994 the latest. By so doing and thereby denying the plaintiff access to the Property, the defendants had retained possession and are to be regarded as being in occupation of the Property, irrespective of whether they physically occupied and used the Property.

64. In this first period up to 19 January 1995, the number of days that the defendants had occupied or are deemed to have occupied the Property are as follows :

(a)	Shiu Tong
	26 October 1993 to 6 March 1994 : 132 days
	7 March 1994 to 19 January 1995 : 319 days
(b)	Shiu Chung
	21 January 1994 to 6 March 1994 : 45 days
	7 March 1994 to 19 January 1995 : 319 days

65. Since each of them is entitled to 28 days of free stay within every six months' period, the number of days of occupation for which a licence fee is payable is as follows :

(a)	Shiu Tong
	Between 26 October 1993 to 19 January 1995, there are three six months' periods, the number of free days is 28 X 3 = 84 days.
	The number of days for which licence fee is payable is therefore 132 + 319 - 84 = 367 days
(b)	Shiu Chung
	Between 21 January 1994 and 19 January 1995, there are two six months' periods, the number of free days is 28 X 2 = 56 days.
	The number of days for which licence fee is payable is therefore 45 + 319 - 56 = 308 days

66. The licence fees payable for the period up to 19 January 1995 are :

(a)	Shiu Tong
	367 days X $800 = $293,600
(b)	Shiu Chung
	308 days X $800 = $246,400.

(2) Post 19 January 1995 period

67. As from 20 January 1995, each of the defendants is liable to pay mesne profits until the plaintiff recovered possession on 29 March 1995, which was achieved with agreement from the defendants' then solicitors, Messrs Johnson Stokes & Master. In the absence of better evidence as to the market rent of the Property, the daily rate of $800 is to be adopted for calculating the mesne profits.

68. The amount of mesne profits that each of the defendants is liable to pay to the plaintiff for the 69 days from 20 January 1995 to 29 March 1995 is therefore 69 days X $800 = $55,200.

CONCLUSION

69. For the aforesaid reasons, there will be judgment for the plaintiff against the defendants for the following :

(A) In HCA671/1995,

(1) the sum of $293,600, being licence fee for the occupation of the property up to 19 January 1995,

(2) the sum of $55,200, being mesne profits for the period between 20 January and 29 March 1995,

(3) interest on the said sums of $293,600 and $55,200 at judgment rate from the date of judgment to full payment.

(B) In HCA672/1995,

(1) the sum of $246,400, being licence fee for the occupation of the Property up to 19 January 1995,

(2) the sum of $55,200, being mesne profits for the period between 20 January and 29 March 1995,

(3) interest on the said sums of $246,400 and $55,200 at judgment rate from the date of judgment to full payment.

70. There is no reason why costs should not follow event. Accordingly, I make an order nisi that the defendants do pay the plaintiff the costs of their respective actions, to be taxed if not agreed.

71. As to the two sums of $650,000 paid by the defendants into court, there will be an order for payment out to the plaintiff forthwith of the amounts of the judgment sums and interest. The remaining amounts to remain in court pending taxation or finalization of the plaintiff's costs or further order of the court with liberty to the parties to apply.