XCHRX CHUNG KAM WING AND ANOTHER v. NON NO FASHION GARMENT LTD.

1994, No. A8575

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. A8575 OF 1994

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J U D G M E N T

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1. This is an appeal against the decision of Master Kwan given on 15th January 1999 ordering that the Applicant should within 14 days pay into court the outstanding of rates and government rent in respect of the said premises totalling HK$619,797.00 as a condition for interim stay of execution relating to possession of the suit premises. The suit premises are the Workshop B5, Ground Floor, Block B, Hong Kong Industrial Centre, 489-491 Castle Peak Road, Kowloon.

2. I have been handed a chronology of events which shows the history of the litigation between the parties and also the litigation in HCA 13493 of 1996 and HCA 20335 of 1998.

3. The Plaintiffs in this action obtained judgment pursuant to a consent order made on 7th February 1995 for, inter alia, delivery up of vacant possession of the suit premises and payment of rents and rates together with damages against the Defendant as the tenant of the premises. The judgment that was obtained was on 8th October 1996. There were a number of steps in the action after judgment which included an order for interim payment of arrears of mesne profits which were due and owing on the part of the Defendant. That was not paid and a winding-up order was obtained against the Defendant on 10th June 1998.

4. On 27th November 1998, the Applicant instituted HCA 20335 of 1998 against the Plaintiffs alleging that it was a co-tenant with the Defendant under a tenancy agreement dated 11th September 1996. In reliance on that tenancy agreement, which is disputed by the Plaintiffs, the Defendant itself instituted HCA 13493 of 1996 on 25th November 1996. The Defendant and the Applicant have the same directors and shareholders and it is surprising that the Applicant did not join in as a co-Plaintiff in the action instituted in 1996. The Plaintiffs dispute that there is a second tenancy the subject matter of the 1996 and the 1998 actions and it is alleged that the document relied on by the Applicant is a forged document.

5. After instituting HCA 20335 of 1998, the Applicant applied by summons issued on 28th November 1998 for, inter alia, leave to defend this action as the person in actual possession of the premises as tenant and also that this action be consolidated with HCA 20335 of 1998. I am told that the Plaintiffs have applied to strike out the Statement of Claim in HCA 20335 of 1998 and that both summonses will be heard before a Master on 13th April 1999. In the meantime, however, the Applicant applied to stay the execution of the order for possession in this action and this was heard before Master Lok on 30th December 1998. This was an inter partes application and after hearing arguments from the solicitors for the Plaintiffs and the Applicant, Master Lok ordered that there be an interim stay of execution relating to the possession of the suit premises on condition that the Applicant do pay a sum of HK$460,000.00 into court within 14 days of the order made and that in default of the aforesaid payment, the interim stay be lifted. The Applicant met that condition within the time stipulated. As a result, there was an interim stay of execution relating to possession of the suit premises.

6. After the hearing before Master Lok, the Plaintiffs received demand notes for government rent for various sub-units within the suit premises issued on 23rd February 1999. It is said that the increased government rent charged by government against the Plaintiffs was a direct result of the illegal partitioning of the suit premises into a number of units which were sublet. Hence the increase in the amount of government rent which was $256,458.00. It is also said that there were outstanding rates to be paid to government. On that basis the Plaintiffs applied to Master Kwan on 15th January 1999 for the order which is under appeal.

7. Master Kwan ordered that the Applicant should also pay into court the outstanding rates and government rent in respect of the suit premises totalling HK$619,797.00 as a condition for interim stay of execution relating to possession of the suit premises. It is difficult to understand how Master Kwan exercised her discretion to make the order that she did. The order of Master Lok imposed the condition for interim stay. That condition was met. Hence there was an interim stay already. There is no appeal from that decision. I do not see how Master Kwan could make an order in effect lifting that stay that had been granted by Master Lok if the sum of HK$619,797.00 was not paid into court within 14 days of her order. I do not consider that she had the jurisdiction to make that order. I have been told that since the making of her order the Applicant has paid the total sum of HK$301,748.87 as rates and this was paid on 30th January 1999.

8. In the circumstances, I allow the appeal and set aside the order of Master Kwan.

[After hearing submissions]

9. I order that the costs of the hearing before Master Kwan and of the appeal be to the Applicant in any event.