LAU TIM FAT AND OTHERS v. LI BANG-YUEN AND OTHERS

HCMP1117/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1117 OF 2004

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D E C I S I O N

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1. This is an application by Lee Fuk Hing Tommy (“the applicant”) to join the action as the 5^th defendant.  The litigation concerns a claim by the plaintiffs that they are beneficial owners of a piece of land in Tsuen Wan.  There has been recent parallel litigation with regard to the land and the present situation is that there is a judgment in default in the plaintiffs’ favour.

2. In 2006 to 2007 one Chu Pak Hei (“Chu”) made an application to become a defendant based on a purported tenancy in which he claimed to be the tenant.  That application failed, he appealed, again without success.

3. The present applicant is a friend of Mr Chu.  His claim is that he became a sub-tenant of Mr Chu in respect of five car parking spaces of the land in issue.  He alleges that he entered into an agreement with Chu on 28 November 2006 for a two-year lease at a rent of $2,500 a month.  It should be noted at the outset that the alleged tenancy agreement from which the applicant claims to be a sub-tenant is not the same tenancy upon which Chu based his unsuccessful claim to join as a defendant in 2006/2007.  That tenancy was declared invalid and of no legal effect.  Rogers VP, in March 2007, concluded that “the applicant [Chu] has shown no basis for establishing any existing right to make use of the various lots whether for car parking or otherwise”.  The new issues before the court are :

(1)	Has the applicant entered into a sub-tenancy with Chu?
(2)	If so, did Chu have a valid tenancy with the 4th defendant, Success Chart Development Ltd (“Success Chart”)?
(3)	Did the person whose name appears on the alleged tenancy between Success Chart and Chu (one “Max Chan Sai Kit”) have any authority to enter into any such agreement with Chu?

4. The court has heard oral testimony from Mr Lee in support of his application.  In my judgment the answer to each of the three questions is plainly “No”.

Question (1)

5. The applicant gave evidence and was cross-examined.  A tenancy agreement was produced together with rental receipts.  The tenancy agreement is dated 28 November 2006.  On 24 November 2006 Deputy High Court Judge Muttrie had granted a stay pending to appeal against Yam J’s decision in August 2006 refusing Chu’s application to become a defendant.

6. The applicant’s evidence was vague and unconvincing.  He said he knew, at the time, that there had been litigation concerning the land and that by signing the sub-tenancy he would become involved.  He therefore allowed himself to become embroiled in these proceedings for the sake of two years interest in five car parking spaces at a rent of $2,500 a month.  I am in no doubt that it was a deliberate attempt to thwart the default judgment by creating an interest in the land which in fact had no substance. 

Question (2)

7. The picture becomes clearer on examination of the “head lease” from which the applicant’s sub-tenancy flows.  It is an agreement between Success Chart and Chu.  It would appear that, according to Land Registry searches, Success Chart is the registered owner of some of the lots in question.  This agreement also is dated 28 November 2006.  The alleged tenancy upon which Chu relied in the earlier proceedings came to an end on 30 October 2006.  The Court of Appeal, in effect, adjudged Chu to have no interest in the land.  Nonetheless, this new tenancy came into existence in the following month.

8. Moreover this new tenancy, upon which this application relies, is unstamped.  Whilst I accept that an unstamped agreement can still be evidence of the parties’ intentions, I have no doubt that in this case the purported unstamped tenancy between Success Chart and Chu is a worthless document.

Question (3)

9. The answer to the final question provides the final nail in the coffin for Mr Lee’s application.  Mr Chu’s alleged tenancy with Success Chart has been signed, on behalf of Success Chart, by Max Chan Sai Kit.

10. There was cogent and plentiful evidence that Max Chan had no such authority to do so.  All four directors of Success Chart were subpoenaed to give evidence.  All four attended court.  Mr David Tang, counsel on behalf of the applicant, called two of the directors.  Both, Mr Chan Lau Fong and Mr Pong Che Yue, confirmed that Max Chan had no such authority.  Mr Chan Lau Fong had also made a written affirmation in which he stated “I wish to inform the court that Mr Chan Sai Kit was never a director of the 4^th defendant [Success Chart] nor was he ever authorised to do any such thing [enter into tenancy agreements] by the 4^th defendant”.

11. Mr Max Chan has not appeared in these or the parallel proceedings, neither has he ever filed an affirmation.  By way of background it was established that he has been an undischarged bankrupt since 2002 and resides in Shenzhen.

12. In short, Max Chan’s authority to sign was neither actual nor ostensible. 

Conclusion

13. The evidence and the submissions all point in one direction in this application.  The application must fail.  Lee Fuk Hing Tommy is not joined as a defendant.  I am satisfied that the purpose of the application was to obstruct the plaintiffs’ claim.

14. There will be a costs order nisi that the applicant should pay the cost of the plaintiffs and the 4^th defendant.